CANADA FX DEBT-C$ dips vs stronger greenback as Mideast tensions ease

    * Canadian dollar at C$1.2613, or 79.28 U.S. cents
    * Bond prices lower across the maturity curve
    * 10-year yield touches its highest since March 22

    TORONTO, April 12 (Reuters) - The Canadian dollar edged
lower against its U.S. counterpart on Thursday, retreating from
a seven-week high reached the day before, as the greenback
broadly climbed and oil prices dipped.
    The U.S. dollar        rebounded after a four-day losing
streak as the threat of a clash between Western powers and
Russia in Syria appeared to recede.              
    Mideast tensions had boosted on Wednesday the price of oil,
one of Canada's major exports, to its highest in more than three
years. U.S. crude        prices were down 0.40 percent on
Thursday at $66.55 a barrel.             
    At 9:41 a.m. EDT (1341 GMT), the Canadian dollar         
was trading 0.3 percent lower at C$1.2613 to the greenback, or
79.28 U.S. cents. The currency traded in a range of C$1.2566 to
    On Wednesday, the loonie touched its strongest since Feb. 19
at C$1.2545. The currency has benefited recently from an upbeat
business survey from the Bank of Canada, stronger-than-expected
domestic jobs data and investor optimism over a deal to revamp
the North American Free Trade Agreement.
    Investors have also been weighing prospects for the proposed
Trans Mountain pipeline expansion. Canadian Prime Minister
Justin Trudeau is set to pile pressure on British Columbia's
provincial government to drop its resistance to the project, but
will try to avoid tougher measures that might alienate voters
who helped his Liberals win power, a source close to the matter
said on Wednesday.             
    Canadian new home prices fell in February for the first time
since July 2010 as recent higher interest rates and tighter
mortgage regulations put a damper on the market, data from
Statistics Canada showed on Thursday.             
    Separate data showed that Canadian home prices were
unchanged in March as the closely watched Toronto market showed
signs of stabilizing. The Teranet-National Bank Composite House
Price Index, which measures changes for repeat sales of
single-family homes, showed prices were flat on a monthly basis
after dipping 0.1 percent in February.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries as demand for safe-haven
assets faded.
    The two-year            fell 3.5 Canadian cents to yield
1.875 percent and the 10-year             declined 30 Canadian
cents to yield 2.242 percent, its highest since March 22. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)