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Canadian dollar gains 0.1% against the greenback

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Trades in a range of 1.3677 to 1.3712

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Price of U.S. oil settles 1% higher

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Canadian bond yields ease across the curve

By Fergal Smith

TORONTO, June 27 (Reuters) - The Canadian dollar edged

higher against its U.S. counterpart on Thursday as oil prices

rose, but the move was limited ahead of U.S. inflation data and

a domestic GDP report.

The loonie was trading 0.1% higher at 1.3690 to the

U.S. dollar, or 73.05 U.S. cents, after moving in a range of

1.3677 to 1.3712.

Investors awaited the release on Friday of the U.S. personal

consumption expenditures price index, the Federal Reserve's

preferred inflation gauge, as well as Canadian GDP data for

April. Economists forecast Canada's economy expanding by 0.3%.

The data is unlikely to derail further interest rate cuts

from the Bank of Canada, said Aaron Hurd, senior portfolio

manager in the currency group at State Street Global Advisors,

adding that the BoC has been clear that "there is room for

things to recover and still have steady disinflation."

Earlier this month, the BoC became the first G7 central bank

to ease policy, lowering its benchmark rate by 25 basis points

to 4.75%. Investors see a roughly 40% chance of another cut in

July.

"The U.S. still has higher rates, stronger growth, a little

bit of a safe haven bid," Hurd said. "The divergence with the

Bank of Canada and the Fed ... I still think that risks us to

break up to 1.40."

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

supply disruption risks from rising geopolitical tensions in the

Middle East helped to counter demand fears. U.S. crude oil

futures settled 1% higher at $81.74 a barrel.

Canadian government bond yields eased across the curve,

tracking moves in U.S. Treasuries. The 10-year was

down 1.8 basis points at 3.472% after earlier touching its

highest level since June 10 at 3.522%.