CANADA FX DEBT-C$ gains on higher crude price, weak U.S. ADP data

* Canadian dollar at C$1.2647 or 79.07 U.S. cents
    * Bond prices mostly higher across the maturity curve

    By Solarina Ho
    TORONTO, April 1 (Reuters) - The Canadian dollar gained
modestly against the greenback on Wednesday following a
weaker-than-expected report on U.S. jobs and slightly stronger
crude prices.
    U.S. private employers added 189,000 jobs in March, lower
than the 225,000 expected, according to payrolls processor ADP.
The report comes ahead of U.S. government employment figures due
on Friday, a holiday in Canada and in many U.S. states.
    The price of crude, a major Canadian export, edged higher as
talks between Iran and six world powers over Tehran's nuclear
program continued past deadline, damping expectations of an
imminent deal that could flood an already over-supplied market
with Iranian crude. 
    "Those two things combined are the two main drivers of the
small Canadian dollar strength this morning," said Greg Moore,
senior currency strategist at RBC Capital Markets.
    At 9:34 a.m. (1334 GMT), the Canadian dollar was at
C$1.2647 to the greenback, or 79.07 U.S. cents, a touch stronger
than Tuesday's close of C$1.2666, or 78.95 U.S. cents.
    Moore expects the currency will likely trade between
C$1.2785 and C$1.26 in the very near term.
    Investors were also digesting data that showed Canadian
manufacturing activity shrank for a second month in March. The
RBC Canadian Manufacturing Purchasing Managers' index (PMI), a
measure of manufacturing business conditions, was at 48.9,
against February's 48.7. A reading below 50 shows a contraction.
    Moore said manufacturing activity has become a notable
economic bellwether. The sector should benefit from cheaper oil
prices and a lower Canadian dollar, but Tuesday's economic
growth report suggested manufacturing was struggling.
    Canadian government bond prices were mostly higher across
the maturity curve, with the two-year rising 1
Canadian cent to yield 0.490 percent and the benchmark 10-year
 rising 27 Canadian cents to yield 1.329 percent.

 (Editing by Bernadette Baum)