CANADA FX DEBT-Loonie nudges higher as oil rallies on Middle East tensions

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil climbs 1.3%
    * Canadian producer prices rise by 0.1% in November 
    * Canadian bond prices gain across a flatter yield curve

    TORONTO, Jan 6 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Monday as Middle East tensions
boosted oil prices and the greenback broadly fell, but the
loonie traded in a narrow range, stopping short of a 14-month
high it posted last week.
    The price of oil, one of Canada's major exports, rose as
investors fretted that the killing of Iran's most prominent
military commander by the United States could trigger a broader
Middle East conflict.             
    U.S. crude oil futures        were up 1.30% at $63.87 a
barrel, while the U.S. dollar        declined against a basket
of major currencies.             
    At 9:19 a.m. (1419 GMT), the Canadian dollar          was
trading 0.1% higher at 1.2981 to the greenback, or 77.04 U.S.
cents. The currency, which strengthened 0.7% last week, traded
in a range of 1.2965 1.2990.
    Last Tuesday, the loonie touched its strongest intraday
level since October 2018 at 1.2952. The commodity-linked
currency has been bolstered in recent weeks by easing of the
trade dispute between the United States and China and signs of
recovery in the global economy.
    Producer prices in Canada grew by 0.1% in November from
October on higher prices for meat, fish and dairy products, as
well as energy and petroleum products, Statistics Canada said.
    Canada's trade data for November is due on Tuesday and
December jobs data is due on Friday, both of which could help
guide expectations for the Bank of Canada interest rate outlook.
    Bank of Canada Governor Stephen Poloz is due to speak on
Thursday. The central bank left its benchmark interest rate on
hold at 1.75% in 2019 even as some other major central banks,
such as the Federal Reserve and the European Central Bank,
    Canadian government bond prices were higher across a flatter
yield curve on Monday. The two-year            rose 1.5 Canadian
cents to yield 1.604% and the 10-year             gained 21
Canadian cents to yield 1.512%, its lowest yield since Dec. 4,

 (Reporting by Fergal Smith
Editing by Nick Zieminski)