CANADA FX DEBT-C$ weakens against firmer greenback as oil dips

* Canadian dollar at C$1.3069, or 76.52 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, May 30 (Reuters) - The Canadian dollar weakened
against its broadly stronger U.S. counterpart on Monday as oil
dipped and investors braced for a potential increase in U.S.
interest rates this summer.
    The greenback strengthened against a basket of major
currencies after Federal Reserve Chair Janet Yellen said on
Friday that a rate increase in the coming months "would be
appropriate," if the economy and labor market continued to
    Oil prices dipped as Iraq raised its crude exports target
ahead of an OPEC meeting while Canadian production was set to
restart after huge wildfires. U.S. crude prices were down
0.20 percent to $49.23 a barrel.      
    Suncor Energy Inc's facilities north of Fort
McMurray, Alberta, are expected to partially restart by the end
of the week, the company said on Sunday, the latest sign
Canadian oil sands producers are coming back online after a
massive wildfire. 
    Last week, the Bank of Canada kept interest rates on hold at
0.50 percent, saying the economy would shrink in the second
quarter as a result of damage from recent wildfires in Alberta
before rebounding later in the year. 
    At 9:46 a.m. EDT (1346 GMT), the Canadian dollar 
was trading at C$1.3069 to the greenback, or 76.52 U.S. cents,
weaker than Friday's close of C$1.3038, or 76.70 U.S. cents.
    The currency's strongest level of the session was C$1.3025,
while its weakest was C$1.3095.
    The loonie touched last week a seven-week low of C$1.3188.  
    Speculators only modestly reduced bullish bets on the
Canadian dollar despite recent wildfires in Alberta and hawkish
comments from Fed officials, Commodity Futures Trading
Commission data showed. Net long Canadian dollar positions fell
to 20,047 contracts in the week ended May 24 from 22,706
contracts in the prior week. 
    Statistics Canada released domestic data which had little
market impact.
    Canada's current account deficit widened to C$16.77 billion
($12.90 billion) in the first quarter from C$15.71 billion in
the previous quarter, while producer prices fell by 0.5 percent
in April.  
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 2
Canadian cents to yield 0.66 percent and the benchmark 10-year
 falling 9 Canadian cents to yield 1.368 percent.    
    U.S. markets are closed for Memorial Day, while markets in
London are shut for a public holiday.

 (Reporting by Fergal Smith; Editing by Nick Zieminski)