* Canadian dollar falls 0.1% against the greenback

* For the month, the loonie was up 1.2%

* Preliminary data points to Q2 growth of 3.4%

* Bond yields rise across the curve

By Fergal Smith

TORONTO, July 31 (Reuters) - The Canadian dollar edged lower

against its U.S. counterpart on Friday, but the currency was

still on track for a monthly gain as domestic data showed

stronger-than-expected economic growth.

The loonie was trading 0.1% lower at 1.4025 per U.S.

dollar, or 71.30 U.S. cents, after trading in a range of 1.4003

to 1.4057. For July, the currency was headed for a gain of 1.2%

as the price of oil, one of Canada's major exports, jumped.

* Canada's gross domestic product grew by 0.3% in May,

eclipsing the 0.2% gain analysts had expected, while a

preliminary estimate pointed to annualized second-quarter growth

of 3.4%, which would be its best quarterly performance for more

than three years.

* "For the Bank of Canada, this will provide them with a bit

more evidence that the economy is adapting to the trade

uncertainty, and will trim their estimate of slack," Douglas

Porter, chief economist at BMO Capital Markets, said in a note.

"But it likely won't change the bigger picture concerns of fresh

tariff threats and lofty energy prices."

* Investors expect the Bank of Canada to leave its benchmark

interest rate on hold over the coming months, while chances of a

hike by year-end edged only slightly higher to 68% from 60%,

swap market data showed.

* The U.S. dollar rose against a basket of major

currencies, recovering some ground after Japanese authorities

stepped in to prop up their currency a day earlier.

* U.S. crude oil futures were trading 2.7% higher at

$85.83 a barrel, adding to their monthly advance, as reports

that some tankers were forced to turn around in the Strait of

Hormuz prompted traders to reassess shipping flows through the

key waterway.

* Canadian bond yields rose across the curve. The 10-year

was up 6 basis points at 3.650%, trading near the

top of its range since May.

* Canada's bond market was set for an early close ahead of

Monday's civic holiday.