* C$ extends gains to C$1.0834, or 92.30 U.S. cents
* Bond prices rise with U.S. Treasuries on mild inflation
* U.S. CPI matches forecasts, soothes inflation concerns
* Canadian manufacturing shipments jump 1.9 pct
TORONTO, Aug 14 (Reuters) - The Canadian dollar extended gains versus the U.S. currency on Friday morning after data showed a jump in Canadian factory sales and as U.S. consumer prices suggested inflation will remain mild as the economy stabilizes.
Canadian data showed the value of Canadian manufacturing shipments rose for the first time in four months, up 1.9 percent in June from May, and well ahead of the 0.5 percent rise predicted by analysts. [ID:nN14293720]
In the United States, the key U.S. consumer price index was unchanged in July, following a 0.7 percent increase in June. [ID:nN13244265], suggesting that U.S. interest rates will not rise any time soon.
"The market has taken the (U.S.) dollar slightly weaker but not significantly so on the release of U.S. CPI," said Jack Spitz, managing director of foreign exchange at National Bank Financial Group. "Better than expected data in Canada has given some impetus to selling dollar/Canada but by and large it'll be U.S. dollar flows that are going to dictate the terms of engagement."
At 9:40 a.m. (1340 GMT), the Canadian currency was at C$1.0834 to the U.S. dollar, or 92.30 U.S. cents, up from C$1.0890 to the U.S. dollar, or 91.83 U.S. cents, at Thursday's close.
Canadian bond prices were higher across the curve, following U.S. Treasuries, which rose on the mild consumer inflation data, which led the market to believe that the U.S. Federal Reserve will keep interest rates low for some time.
The two-year Canadian bond edged up 3 Canadian cents to C$99.36 to yield 1.319 percent, while the 10-year bond rose 27 Canadian cents to C$102.27 to yield 3.474 percent.
The 30-year bond gained 45 Canadian cents to C$117.55 to yield 3.953 percent. In the United States, the 30-year bond yielded 4.408 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)
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