CANADA FX DEBT-C$ firms as oil prices climb, central bank speech awaited

    * Canadian dollar at C$1.3444, or 74.38 U.S. cents
    * Bond prices lower across the yield curve

    TORONTO, June 12 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday as oil
prices rose and ahead of a speech by Bank of Canada Senior
Deputy Governor Carolyn Wilkins.
    Gains for the loonie follow surprisingly strong domestic
jobs data on Friday that boosted the argument for the Bank of
Canada to raise interest rates.             
    Wilkins will give a speech on the economy. The central bank
will release her prepared remarks at 1:20 p.m. ET (1720 GMT).
    Last week, Bank of Canada Governor Stephen Poloz said he is
comforted by recent signs of economic strength even as the
central bank warned that rising consumer debt levels and an
unbalanced housing market have raised households' financial
    Prices of oil, one of Canada's major exports, rose to break
a three-day losing streak after futures traders increased their
bets on a renewed price upswing.             
    U.S. crude        prices were up 1.57 percent at $46.55 a
    The U.S. dollar        dipped against a basket of major
currencies ahead of Wednesday's decision by the Federal Reserve
on U.S. interest rates, while the euro was lifted by the results
of elections in France and Italy.                         
    At 9:20 a.m. ET (1320 GMT), the Canadian dollar          was
trading at C$1.3444 to the greenback, or 74.38 U.S. cents, up
0.2 percent.
    The currency traded in a range of C$1.3432 to C$1.3465. On
Friday, it touched its strongest since late May at C$1.3424.
    The foreign exchange options market is showing much less
risk of a sharp drop in the Canadian dollar than before last
November's U.S. presidential election, which could spell bad
news for speculators who have heavily shorted the currency.
    Net short positions on the loonie were trimmed for a second
straight week to 94,501 contracts as of June 6 from 98,187 a
week earlier, data from the Commodity Futures Trading Commission
and Reuters calculations showed on Friday but held near a record
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
dipped 1.5 Canadian cents to yield 0.747 percent, and the
10-year             declined 7 Canadian cents to yield 1.432
    On Tuesday, the 10-year yield had touched its lowest
intraday level in nearly seven months at 1.373 percent.

 (Reporting by Fergal Smith; Editing by W Simon)