CANADA FX DEBT-C$ rebounds from 10-day low as risk appetite recovers

    * Canadian dollar at C$1.3150, or 76.05 U.S. cents
    * Loonie touches a 10-day low at C$1.3218
    * Price of U.S. oil rises 0.9 percent
    * Bond prices lower across the yield curve

    TORONTO, July 12 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Thursday,
rebounding from an earlier 10-day low, as investor appetite for
risk recovered and after the Bank of Canada raised interest
rates on Wednesday for the second time this year.
    At 8:41 a.m. EDT (1241 GMT), the Canadian dollar         
was trading 0.5 percent higher at C$1.3150 to the greenback, or
76.05 U.S. cents. The currency touched its weakest intraday
since July 2 at C$1.3218.    
    Stocks and commodity markets rose, having suffered tailspins
in the previous session as the United States ratcheted up trade
war threats on China.             
    Canada exports many commodities, including oil, and runs a
current account deficit so its economy could be hurt if the flow
of trade or capital slows.
    U.S. crude oil futures        rose 0.9 percent to $71.01,
recouping some ground after sharp losses the previous session
when Libya said it would resume oil exports.             
    The Bank of Canada raised its benchmark interest rate on
Wednesday by 25 basis points to 1.50 percent and signaled more
rate hikes to come, saying that while mounting trade tensions
with the United States were a concern, their impact on growth
and inflation looked modest so far.             
    Money markets see a 65 percent chance of another hike by
    Canadian home prices rose in June from May, the fourth
straight rise after weakness late last year, returning national
prices to just barely above the previous peak in August 2017,
the Teranet-National Bank Composite House Price Index showed.
    Separate data from Statistics Canada showed that new home
prices in Canada were flat in May for a third month in a row. On
a year-on-year basis, prices were up 0.9 percent.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after U.S. data pointed
to a steady buildup of inflation pressures that could keep the
Federal Reserve on a path of gradual interest rate increases.             
    The two-year            fell 3 Canadian cents to yield 1.969
percent and the 10-year             declined 15 Canadian cents
to yield 2.168 percent.
    On Wednesday, the 2-year yield touched its highest in nearly
seven weeks at 1.977 percent.

 (Reporting by Fergal Smith
Editing by Susan Thomas)