CANADA FX DEBT-C$ climbs to 1-week high, boosted by higher oil

    * Canadian dollar at C$1.3203, or 75.74 U.S. cents
    * Bond prices lower across the yield curve
    * Loonie touches its strongest since June 19 at C$1.3197

    TORONTO, June 27 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Tuesday, shaking
off an escalated lumber dispute with the U.S. as oil prices
rose, while the greenback lost ground against a basket of major
    Prices of oil, one of Canada's major exports, rose for a
fourth consecutive session but worries over persistent
oversupply capped gains.             
    The U.S. dollar        fell, pressured by strength in the
euro after European Central Bank President Mario Draghi opened
the door to tweaks that might begin to reduce the central bank's
emergency stimulus to the economy shortly.             
    Escalating a trade dispute with Canada in the run-up to
talks on renegotiating NAFTA, the U.S. Commerce Department on
Monday imposed preliminary anti-dumping duties on Canadian
softwood lumber of up to 7.72 percent.             
    At 9:17 a.m. ET (1317 GMT), the Canadian dollar          was
trading at C$1.3203 to the greenback, or 75.74 U.S. cents, up
0.3 percent.
    The currency's weakest level of the session was C$1.3260,
while it touched its strongest since June 19 at C$1.3197.
    Gains for the loonie came ahead of remarks on Wednesday by
Bank of Canada Governor Stephen Poloz, who will be participating
in a panel discussion at the European Central Bank's Forum on
Central Banking.
    Data on Friday showing weaker-than-expected domestic
inflation has reduced the chances of an interest rate hike next
month from the Bank of Canada. But analysts expect policymakers
to stay hawkish amid concern that rates have been low for too
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries and German Bunds. The
two-year            price fell 7 Canadian cents to yield 0.942
percent and the 10-year             declined 48 Canadian cents
to yield 1.518 percent.
    Canada's gross domestic product data for April is due on
Friday. Also on Friday, the Bank of Canada will release its
business outlook report.

 (Reporting by Fergal Smith; Editing by Nick Zieminski)