CANADA FX DEBT-C$ strengthens with oil prices, investors to watch NAFTA talks

    * Canadian dollar at C$1.2722, or 78.60 U.S. cents
    * Bond prices mixed across the yield curve

    TORONTO, Aug 16 (Reuters) - The Canadian dollar rebounded on
Wednesday from a one-month low hit the day before against its
U.S. counterpart, helped by higher oil prices, while investors
awaited the start of negotiations to modernize the North
American Free Trade Agreement.
     Prices of oil, one of Canada's major exports, were lifted
by declining U.S. crude inventories, although markets were still
restrained by excess supply.             
    U.S. crude        prices were up 0.19 percent to $47.64 a
    The United States, Canada and Mexico are due to kick off
NAFTA talks later in the day. The biggest uncertainty is whether
a deal can pass President Donald Trump's "America First" test.
    At 9:05 a.m. ET (1305 GMT), the Canadian dollar          was
trading at C$1.2722 to the greenback, or 78.60 U.S. cents, up
0.3 percent.
    The currency traded in a range of C$1.2712 to C$1.2770.
    On Tuesday, the loonie hit its lowest level since July 12 at
C$1.2778, pressured by broader gains for the greenback as North
Korea tensions eased and data showed a jump in U.S. retail
    Foreign investors sold a net C$923 million ($724.83 million)
in Canadian securities in June after buying C$29.44 billion in
securities in May, Statistics Canada said. It was the first
monthly divestment since July 2015.             
    Canadian government bond prices were mixed across the yield
curve, with the two-year            price up 0.5 Canadian cent
to yield 1.241 percent and the 10-year             falling 3.5
Canadian cents to yield 1.912 percent.
    Canada's inflation data for July is due on Friday.         

 (Reporting by Fergal Smith; Editing by W Simon)