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CANADA FX DEBT-C$ hits one-week high on robust inflation, retail sales data

* Canadian dollar at C$1.2761, or 78.36 U.S. cents

* Bond prices lower across the maturity curve

TORONTO, Dec 21 (Reuters) - The Canadian dollar hit its strongest level against its U.S. counterpart in a week on Thursday, boosted by strong inflation and retail sales data that raised expectations the Bank of Canada could hike rates again as soon as January.

* At 9:17 a.m. ET (1417 GMT), the Canadian dollar was trading at C$1.2761 to the greenback, or 78.36 U.S. cents, up 0.6 percent.

* It had touched C$1.2720, or 78.62 U.S. cents, soon after the 8:30 a.m. release of November inflation data and October retail sales numbers.

* The data suggested an earlier-than-expected hike, said Andrew Grantham, a senior economist at CIBC Capital Markets. "We're seeing that play out in financial markets," he said.

* Chances of a rate hike in January have increased to 49 percent from 38 percent just before the data releases, the overnight index swaps market indicated.

* Canadian government bond prices were lower across the

maturity curve, with the two-year price down 7.5

Canadian cents to yield 1.681 percent and the benchmark 10-year falling 47 Canadian cents to yield 2.05 percent.

* The Canada-U.S. two-year bond spread narrowed to -18.4 basis points, while the 10-year spread came in to -45 basis points.

(Reporting by Alastair Sharp; Editing by Bernadette Baum)