CANADA FX DEBT-Canadian dollar firms as worries ease about rising trade tensions

    * Canadian dollar rises 0.1% against the greenback
    * Loonie trades in a range of 1.3296 to 1.3328
    * Price of U.S. oil increases 1.5%
    * Canadian bond prices fall across the yield curve

    TORONTO, Oct 9 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Wednesday but remained in this
week's narrow range as investors grew more optimistic about
trade talks between the United States and China.
    Wall Street was set to rise for the first time in three
sessions after a report that China is still open to agreeing to
a partial trade deal with the United States. The two countries
begin high-level trade talks on Thursday.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from a more certain outlook for global
    U.S. crude oil futures        rose 1.5% to $53.42 a barrel
as concerns eased about escalating U.S.-China trade tensions,
while unrest in OPEC members Iraq and Ecuador also supported
    At 9:07 a.m. (1307 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3318 to the greenback, or 75.09 U.S.
cents. The currency traded in a range of 1.3296 to 1.3328.
    Since the start of the week, the range has been only
slightly wider at between 1.3289 and 1.3336.
    Canada's employment report for September, due on Friday, can
help guide expectations for the Bank of Canada policy outlook.
    Robust job gains this year have supported the central bank's
decision to leave its benchmark interest rate on hold at 1.75%
this year even as some of its peers, including the U.S. Federal
Reserve and the European Central Bank, have reduced borrowing
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 1.5 Canadian cents to
yield 1.449% and the benchmark 10-year             falling 9
Canadian cents to yield 1.288%.
    The 2-year yield rose 1.4 basis points further above the
yield on its U.S. counterpart to a spread of 3 basis points.
Last Wednesday, the spread turned positive for the first time in
about two years.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)