*

Canadian dollar gains 0.2% against the greenback

*

Trades in a range of 1.3904 to 1.3947

*

Price of oil settles 3.45% lower

*

Bond yields ease across the curve

By Fergal Smith

TORONTO, Sept 29 (Reuters) - The Canadian dollar

strengthened against its U.S. counterpart on Monday as the

greenback gave back some of its recent broad-based gains, but

the loonie's move was limited as oil prices tumbled.

The loonie was trading 0.2% higher at 1.3912 per U.S.

dollar, or 71.88 U.S. cents, after trading in a range of 1.3904

to 1.3947. On Friday, it touched a four-month intraday low of

1.3958.

"It looks like we're seeing a bit of profit-taking" by

speculators that were short the Canadian dollar, said Darren

Richardson, chief operating officer at Richardson International

Currency Exchange Inc.

Canadian exporters taking advantage of recent gains in the

U.S. dollar to lock in currency rates at favorable levels has

added to support for the loonie, Richardson said.

The U.S. dollar fell against a basket of major

currencies following a rally last week that was driven by

stronger-than-expected U.S. economic data. The U.S. nonfarm

payrolls report, due on Friday, could offer further clues on the

state of the U.S. economy and prospects for additional Federal

Reserve interest rate cuts.

Investors have raised bearish bets on the Canadian dollar to

the highest level since April, data from the U.S. Commodity

Futures Trading Commission showed on Friday. The net short

position in the currency was at 114,806 contracts as of

September 23, up from 107,177.

The price of oil settled 3.45% lower at $63.45 a barrel

on Monday on expectations that OPEC+ will approve another

increase to crude oil production at its meeting on Sunday.

Canadian government bond yields moved lower across a flatter

curve, tracking moves for U.S. Treasuries. The 10-year

was down 4.3 basis points at 3.185%.