CANADA FX DEBT-C$ softens on Trump's NAFTA comments, weaker oil prices

    * Canadian dollar at C$1.2589, or 79.43 U.S. cents
    * Bond prices higher across the maturity curve

    TORONTO, Aug 23 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Wednesday, pressured in
part by softer oil prices and threats from U.S. President Donald
Trump to terminate the NAFTA treaty.
    In wide-ranging comments made at a rally with supporters on
Tuesday, Trump signaled he might end the North American Free
Trade Agreement with Mexico and Canada to jumpstart negotiations
on modernizing the deal.             
    At 9:38 a.m. EDT (1338 GMT), the Canadian dollar         
was down 0.2 percent at C$1.2589 to the greenback, or 79.43 U.S.
    The currency traded within a narrow range of C$1.2561 to
C$1.2598, supported by recent upbeat economic data that has
prompted expectations the Bank of Canada will raise interest
rates again this fall.
    Oil, a key Canadian export, was under pressure on concerns
over rising production in Libya and a surprise increase in U.S.
gasoline inventories, though prices pared earlier losses. U.S.
crude        prices were down 0.19 percent to $47.74 a barrel.
    With few domestic drivers to move the currency this week,
all eyes are on the annual meeting of global central bankers in
Jackson Hole later. In particular, investors are awaiting
speeches from U.S. Federal Reserve Chair Janet Yellen and
European Central Bank President Mario Draghi on Friday, though
neither is expected to make new policy statements.       
    Canadian government bond prices were higher across the
maturity curve, with the two-year            price up 1.5
Canadian cents to yield 1.262 percent and the benchmark 10-year
            rising 18 Canadian cents to yield 1.9 percent.
    The Canada-U.S. two-year bond spread was -5.1 basis points,
while the 10-year spread was 28.4 basis points.

 (Reporting by Solarina Ho; Editing by Paul Simao)