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Canadian dollar falls 0.1% against the greenback

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Touches a one-week high at 1.3615

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Price of U.S. oil settles 2.7% higher

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Bond yields rise across the curve

By Fergal Smith

TORONTO, May 28 (Reuters) - The Canadian dollar edged

lower against its U.S. counterpart on Tuesday as investors

awaited domestic GDP data this week that could guide

expectations for Bank of Canada interest rate cuts.

The loonie was trading 0.1% lower at 1.3645 to the

U.S. dollar, or 73.29 U.S. cents, after earlier touching its

strongest level since last Tuesday at 1.3615.

Canadian gross domestic product data, due on Friday, is

expected to show the economy expanding at an annualized rate of

2.2% in the first quarter. That would be slower than the 2.8%

pace that the Bank of Canada forecast in April.

"With the population surging, output likely contracted for a

seventh consecutive quarter on a per-capita basis, further

widening Canada's performance gap relative to the United

States," Karl Schamotta, chief market strategist at Corpay, said

in a note.

Canadian Finance Minister Chrystia Freeland said that last

month's federal budget had created conditions for interest rates

to come down.

The swaps market sees a 64% chance the BoC would begin an

interest rate-cutting campaign at a policy decision on June 5.

The price of oil, one of Canada's major exports, rose on the

expectation that OPEC+ will maintain crude supply curbs at its

June 2 meeting. U.S. crude oil futures settled 2.7%

higher at $79.83 a barrel.

Canadian government bond yields moved higher across the

curve, tracking moves in U.S. Treasuries, after a U.S. consumer

confidence report showed unexpected improvement in May.

The 10-year was up 7.5 basis points at 3.701%.