(Adds analyst quote and details throughout; updates prices)
* Canadian dollar was nearly unchanged against the greenback
* Canadian factory activity expands at slower pace in December
* Price of U.S. oil increases by 0.2%
* Canadian bond prices rally across a flatter yield curve
TORONTO, Jan 2 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Thursday as Chinese stimulus buoyed investor sentiment, with the loonie holding on to its gains from 2019, when it was the top-performing G10 currency. U.S. stocks extended their rally into the new year as monetary policy easing from Beijing to prop up its economy added to optimism fueled by easing trade tensions and an improving global outlook. Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for the global economy. "Positive developments on the trade front, along with firmer oil prices as 2020 kicks off, should place USD-CAD in a sell-the-rally stage for the time being," Ronald Simpson, managing director, global currency analysis at Action Economics, said in a note.
a barrel, supported by signs of improving Washington-Beijing trade relations and rising tensions in the Middle East.
trading nearly unchanged at 1.2986 to the greenback, or 77.01 U.S. cents. The currency, which traded in a range of 1.2969 to 1.3008
against a basket of major currencies and data showing that Canadian manufacturing activity expanded in December at its slowest pace in four months. The IHS Markit Canada Manufacturing Purchasing Managers' index (PMI) fell to a seasonally adjusted 50.4 in December, its lowest level since August, from 51.4 in November. On Tuesday, the loonie notched a 14-month high at 1.2952. The currency strengthened 5% in 2019. Canadian government bond prices were higher across a flatter
cents to yield 1.638%.
(Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)