CANADA FX DEBT-C$ strengthens to a 12-day high as oil rallies

* Canadian dollar at C$1.3005, or 76.89 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, March 30 (Reuters) - The Canadian dollar
strengthened to a 12-day high against its U.S. counterpart on
Wednesday as crude oil prices rose and investors rowed back
expectations for U.S. interest rate hikes.
    The U.S. dollar weakened against a basket of major
currencies after Federal Reserve Chair Janet Yellen said on
Tuesday the U.S. central bank should proceed "cautiously" with
rate hikes. 
    Oil prices rose as a weaker U.S. dollar spurred interest in
riskier assets and the International Energy Agency said
expectations for a deluge of oil from Iran were misplaced.
    U.S. crude prices were up 2.19 percent to $39.12 a
    At 9:23 a.m. EDT (1323 GMT), the Canadian dollar 
was trading at C$1.3005 to the greenback, or 76.89 U.S. cents,  
  stronger than Tuesday's close of C$1.3065, or 76.54 U.S.
    The currency's weakest level was C$1.3079, while it touched
its strongest since March 18 at C$1.2987.
    Canadian Finance Minister Bill Morneau, who last week
unveiled a deficit-laden budget designed to help boost the
sluggish economy, will speak to reporters at 11:45
a.m. EDT (1545 GMT) before making a speech at in New York.
    On Sunday, Morneau said the government believes the federal
budget will be balanced in "about" five years, due to higher
growth spurred by deficit spending. 
    Bank of Canada deputy governor Lynn Patterson will speak in
Alberta on the fall in commodity prices. Investors will be
watching for clues about whether the recent oil price recovery
and federal budget have made the central bank less inclined to
cut rates further.
    Patterson's remarks will be published at 2:20 p.m. EDT (1620
    Canadian government bond prices were lower across the
maturity curve in sympathy with U.S. Treasuries.
    The two-year price fell 3 Canadian cents to yield
0.528 percent and the benchmark 10-year was down 35
Canadian cents to yield 1.217 percent.
    On Tuesday, the 10-year yield hit a three-week low at 1.177
    January gross domestic product data is awaited on Thursday.
Analysts expect 0.3 percent growth for the month, which would
reinforce expectations that first-quarter growth will exceed the
Bank of Canada's forecast of 1 percent. 

 (Reporting by Fergal Smith; Editing by Nick Zieminski)