CANADA FX DEBT-C$ outperforms despite oil slump as Yellen speech in focus

 (Adds analyst comment, updates figures)
    * Canadian dollar at C$1.2530 or 79.81 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Aug 24 (Reuters) - The Canadian dollar clung to
gains against the U.S. dollar on Thursday, outperforming key
currency rivals even as oil prices fell and the greenback inched
higher ahead of a meeting of global central bankers.
    With little domestic news to steer direction until next
week's quarterly gross domestic product report, investors are
focused on the bankers' summit in Jackson Hole, Wyoming.
    Speeches by Federal Reserve Chair Janet Yellen and European
Central Bank chief Mario Draghi will be parsed for clues on
monetary policy direction, even as significant new policy
signals were seen as unlikely.
    "The bar's been set fairly high there in terms of (Yellen)
coming out and reaffirming that they have a policy to push ahead
on raising interest rates," said Mark Chandler, head of Canadian
fixed income and currency strategy at RBC Capital Markets.
    "If she ends up disappointing that expectation there is a
chance the (Canadian) currency could get a little bit stronger."
    At 4:00 p.m. ET (2000 GMT), the Canadian dollar          was
trading at C$1.2530 to the greenback, or 79.81 U.S. cents, up
0.2 percent.
    It was also stronger against most major currencies,
including the euro           , the Australian            and New
Zealand dollars            and the British pound           .
    The loonie, which traded between C$1.2519 and C$1.2561
during the session, has rallied nearly 7 percent this year, 
helped by a broadly weaker U.S. dollar and upbeat domestic
economic data that prompted the Bank of Canada to raise interest
rates for the first time in seven years last month. The central
bank is expected to raise rates again this fall.
    The currency's strength came even as the price of oil
       , a key Canadian export, settled down about 2 percent on
demand concerns. U.S. Gulf Coast refineries shut operations as
Hurricane Harvey was forecast to turn into a major hurricane.
    "The Canadian dollar and oil relationship has been looser
than in the past - the correlation's been slipping," said
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 1
Canadian cent to yield 1.266 percent and the benchmark 10-year
            falling 4 Canadian cents to yield 1.886 percent.
    The Canada-U.S. two-year bond spread stood at -6.5 basis
points, while the 10-year spread stood at -30.9 basis points.

 (Reporting by Solarina Ho; Editing by Bill Trott and James