* Canadian dollar gains 0.3% against the greenback

* Trades in a range of 1.4015 to 1.4080

* Price of oil decreases 1.4%

* Bond yields edge higher across the curve

By Fergal Smith

TORONTO, Aug 5 (Reuters) - The Canadian dollar strengthened

against its U.S. counterpart on Wednesday as the greenback

posted broad-based declines and recent domestic data lent

support to the loonie.

The loonie was trading 0.3% higher at 1.4025 per U.S.

dollar, or 71.30 U.S. cents, after moving in a range of 1.4015

to 1.4080.

* "We still rather think there is a case for some modest

fundamental improvement in the Canadian dollar - based on stable

front-end spreads and relative data surprises," Shaun Osborne

and Eric Theoret, strategists at Scotiabank, said in a note.

* Canada's 2-year yield was trading about 136

basis points below the equivalent U.S. rate, with the gap

narrowing from 145 basis points last week.

* Canada's trade surplus hit a four-year high in June and

the manufacturing sector expanded in July at the fastest pace in

more than four years, data on Tuesday showed.

* Recent preliminary data has pointed to the economy growing

by 3.4% in the second quarter on an annualized basis.

* Canadian employment data, due on Friday, could offer

further clues on the state of Canada's economy. Analysts expect

a gain of 15,000 jobs.

* The U.S. dollar edged lower against a basket of

major currencies as revived hopes of an end to the war with Iran

blunted safe-haven demand.

* The price of oil, one of Canada's major exports, was

trading 1.4% lower at $74.75 a barrel.

* Canadian government bond yields edged higher across the

curve, with the 10-year up 1.9 basis points at

3.568%.