CANADA FX DEBT-C$ rises as trade data boosts outlook for the economy

    * Canadian dollar rises 0.1% against the greenback
    * Canada posts narrowest trade deficit in six months
    * Price of U.S. oil falls 0.2%
    * Canadian bond prices rise across a flatter yield curve

    TORONTO, June 6 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday as the greenback
broadly declined, while domestic data showed Canada's smallest
trade deficit in six months.
    Rising exports and falling imports helped shrink Canada's
trade deficit in goods in April to C$966 million, Statistics
Canada said, in the latest sign the economy is recovering from a
slowdown. April's trade deficit was the smallest since October
last year.             
    The U.S. dollar       , which has been pressured this week
by speculation that the Federal Reserve would cut interest
rates, lost ground against a basket of major currencies. The
decline for the greenback came as the ECB refrained from hinting
at an interest rate cut, boosting the euro       .    
    At 9:06 a.m. (1306 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3396 to the greenback, or 74.65 U.S.
cents. The currency, which on Wednesday touched its strongest in
two weeks at 1.3363, traded in a range of 1.3390 to 1.3431.
    Despite recent upbeat domestic data, including a record jobs
gain in April, money markets expect the Bank of Canada to cut
interest rates by the end of the year.           
    The Canadian dollar is likely to strengthen less than
previously expected against its U.S. counterpart over the coming
year, because of more attractive valuations and better prospects
for return in other currencies, a Reuters poll showed.
    Mexican and U.S. officials are set to resume talks in
Washington on Thursday aimed at heading off punitive tariffs on
Mexican goods after President Donald Trump said more needed to
be done to curb migration at the southern U.S. border.
    Investors worry that the tariffs could undermine chances of
a new North American trade deal coming into force. Canada sends
about 75% of its exports, including oil, to the United States.
    The price of oil held near a five-month low due to rising
U.S. supply and a stalling global economy. U.S. crude oil
futures        were down 0.2% at $51.59 a barrel.             
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 2 Canadian cents to
yield 1.333% and the 10-year             rising 12 Canadian
cents to yield 1.435%.
    On Wednesday, the 10-year yield touched its lowest intraday
since June 2017 at 1.410%.
    Canada's jobs report for May is due on Friday.

 (Reporting by Fergal Smith; Editing by David Gregorio)