CANADA FX DEBT-Canadian dlr notches 2-week high as Wall Street rallies

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Canadian dollar rises 0.5% against greenback

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Touches its strongest since March 7 at 1.3641

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Price of U.S. oil increases 0.5%

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Canadian bond yields trade mixed across steeper curve

TORONTO, March 23 (Reuters) - The Canadian dollar strengthened to a two-week high against its U.S. counterpart on Thursday as optimism that the Federal Reserve's interest rate hiking campaign is nearing an end bolstered equity markets.

Wall Street's main indexes opened higher and the U.S. dollar was trading near its lowest level since early February against a basket of major currencies after the Fed on Wednesday raised its benchmark rate by 25 basis points but dropped language saying "ongoing increases" would likely be appropriate.

That indicated a clear shift in the U.S. central bank's stance as it assesses recent turmoil in the banking sector that threatens to cause a severe economic downturn.

The Canadian dollar was trading 0.5% higher at 1.3655 to the greenback, or 73.23 U.S. cents, after touching its strongest level since March 7 at 1.3641.

Adding to support for the loonie, the price of oil, one of Canada's major exports, moved higher for a fourth day. U.S. crude prices were up 0.5% at $71.27 a barrel.

Meanwhile, investors were awaiting Canadian retail sales data for January, due on Friday, for clues on the strength of the domestic economy. Analysts forecast sales to rise by 0.7% from December.

Canadian government bond yields were mixed across a steeper curve. The 2-year eased nearly 1 basis point to 3.512%, while the 10-year was up 3.7 basis points at 2.767%. (Reporting by Fergal Smith; editing by Jonathan Oatis)