CANADA FX DEBT-C$ strengthens against weaker greenback before Yellen speech
* Canadian dollar at C$1.2881, or 77.63 U.S. cents * Bond prices slightly higher across the maturity curve TORONTO, Aug 26 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday as the greenback edged lower ahead of a speech by Federal Reserve Chair Janet Yellen that could map out a clearer path for U.S. interest rates. Losses for the U.S. dollar against a basket of major currencies came as data showed U.S. economic growth was a bit more sluggish than initially thought in the second quarter. Investors were wary of Yellen hinting at a near-term interest rate hike when she speaks, which could divert some of the liquidity that has underpinned riskier assets worldwide, though others predicted she would strike a more equivocal note. Bank of Canada Governor Stephen Poloz is attending the annual economic policy symposium in Jackson Hole at which Yellen is speaking, but will not have a speaking role, a spokesperson for the central bank said earlier this week. U.S. crude prices were unchanged at $47.33 a barrel. Oil fell earlier in the day after the Saudi energy minister watered down expectations that the world's largest producers might agree next month to limit their output. At 9:23 a.m. EDT (1323 GMT), the Canadian dollar was trading at C$1.2881 to the greenback, or 77.63 U.S. cents, stronger than Thursday's close of C$1.2926, or 77.36 U.S. The currency's weakest level of the session was C$1.2922, while it touched its strongest since Tuesday at C$1.2862. Canada will likely maintain its 2 percent inflation target and bypass alternative policy goals when the central bank renews its inflation-control agreement this year, strategists say, but the main measure of core inflation may change. Canadian government bond prices were slightly higher across the maturity curve, with the two-year bond up 1.5 Canadian cents to yield 0.584 percent and the benchmark 10-year rising 9 Canadian cents to yield 1.056 percent. (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
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