CANADA FX DEBT-C$ recovers from 1-month low as Bank of Canada avoids fireworks

 (Adds analyst quote, details on Bank of Canada speech; updates
    * Canadian dollar at C$1.2486, or 80.09 U.S. cents
    * Bond prices higher across the yield curve

    By Fergal Smith
    TORONTO, Oct 3 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Tuesday, recovering from an
earlier one-month low, as a speech by a Bank of Canada
policymaker did not offer major clues on the outlook for
interest rates.
    Canada's economic growth is expected to decline over the
next few quarters but continue to exceed the rate of potential
output, Deputy Governor Sylvain Leduc said in a speech that
added another dovish tone to the bank's message.                
    The central bank has raised rates twice since July. But the
chances of another hike as soon as this month have dwindled to
20 percent from nearly 40 percent before Governor Stephen Poloz
signaled last week that a third hike was not imminent, the
overnight index swaps market indicated.                       
    "We didn't get headline risk out of the Bank of Canada
today," said Eric Theoret, a currency strategist at Scotiabank.
"It was a very quiet session."
    At 5 p.m. EDT (2100 GMT), the Canadian dollar          was
trading at C$1.2486 to the greenback, or 80.09 U.S. cents, up
0.2 percent.
    The currency's strongest level of the session was C$1.2481,
while it touched its weakest since Aug. 31 at C$1.2539.    
    Prices of oil, one of Canada's major exports, fell as
speculators took profits on some large positions that have built
up in the last couple of weeks.             
    U.S. crude        prices settled 0.3 percent lower at $50.42
a barrel.        
    Canadian government bond prices were higher across the yield
curve, with the two-year            gaining 2 Canadian cents to
yield 1.523 percent and the 10-year             rising 12
Canadian cents to yield 2.113 percent.
    Canada's trade data for August is due on Thursday and the
September employment report is scheduled for release on Friday.

 (Reporting by Fergal Smith; Editing by Paul Simao and James