* Canadian dollar rises 0.4% against the greenback * Loonie touches its strongest since October 2018 at 1.2805 * Price of U.S. crude increases 1.1% * Canada’s 10-year yield posts a 3-week high at 0.790% TORONTO, Dec 4 (Reuters) - The Canadian dollar strengthened to a two-year high against its U.S. counterpart on Friday as oil prices rose and data showed Canada’s economy added more jobs than expected in November, with the currency on track to advance for the third straight week. Canada added 62,000 jobs in November and the unemployment rate fell to 8.5%, both beating analyst expectations, Statistics Canada data indicated. Separate data from Statistics Canada showed that Canada’s trade deficit narrowed slightly to C$3.8 billion in October as exports grew at a faster pace than imports. The price of oil, one of Canada’s major exports, rose 1.1%, while the Canadian dollar was trading 0.4% higher at 1.2812 to the greenback, or 78.05 U.S. cents. The currency touched its strongest intraday level since October 2018 at 1.2805. For the week, the loonie was up 1.4%. The market also digested U.S. data showing the smallest gain for nonfarm payrolls since the jobs recovery started in May, hindered by a resurgence in new COVID-19 cases. Canada has also seen a resurgence in infections. The economic impact of the second wave of COVID-19 in Canada has been deeper than expected and the government must be agile to ensure it can respond to gaps in supports should any emerge, Finance Minister Chrystia Freeland said on Thursday. Domestic economic stimulus and the rollout of a COVID-19 vaccine are expected to benefit the Canadian dollar, a Reuters poll of FX strategists showed. A separate Reuters poll showed that the Bank of Canada will not increase its asset-purchase program anytime soon. The central bank is due to make an interest rate decision next week. Canadian government bond yields were higher across a steeper curve on Friday, with the 10-year up 5.2 basis points at 0.790%. That was its highest level since Nov. 13. (Reporting by Fergal Smith; Editing by Jonathan Oatis)