CANADA FX DEBT-C$ dips but holds near 14-month high as oil climbs

    * Canadian dollar at C$1.2613, or 79.28 U.S. cents
    * Bond prices higher across the yield curve

    TORONTO, July 20 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, but held near 14-month
highs as oil prices rose and the greenback turned lower against
a basket of major currencies.
    The U.S. dollar        gave up earlier gains after a
regional gauge of business conditions fell to an eight-month low
and as comments by European Central Bank President Mario Draghi
boosted the euro.             
    Oil prices built on gains from the previous session after
falling U.S. crude and oil product inventories lifted the
    U.S. crude        prices were up 0.74 percent to $47.47 a
    At 9:22 a.m. ET (1322 GMT), the Canadian dollar          was
trading at C$1.2613 to the greenback, or 79.28 U.S. cents, down
0.1 percent.
    The currency traded in a range of C$1.2595 to C$1.2640.
    On Wednesday, the loonie touched its strongest since early
May 2016 at C$1.2578. Recent strength for the currency has come
after the Bank of Canada turned hawkish in June. 
    The central bank raised interest rates last week for the
first time since 2010 and signaled it would hike again over the
coming months.
    Canadian government bond prices were higher across the yield
 curve, with the two-year            up 2.4 Canadian cents to
yield 1.242 percent and the 10-year             rising 22
Canadian cents to yield 1.873 percent.
    Last week, the 10-year yield touched its highest since
December 2014 at 1.948 percent.
    Retail sales data for May and the June inflation report are
due out on Friday.         
    The Bank of Canada has said it expects tame inflation to be
temporary but economists will watch the report to try to gauge
the timing of the central bank's next rate increase. 

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)