CANADA FX DEBT-C$ pares Monday's decline as greenback rally stalls

    * Canadian dollar rises 0.1% against the greenback
    * Canadian manufacturing activity contracts for 3rd straight
    * Canadian bond prices dip across the yield curve
    * Canada's 2-year yield touches a one-month high at 1.504%

    TORONTO, July 2 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Tuesday, paring some of Monday's
decline, as the boost to the greenback from a weekend trade
truce between the United States and China faded.
    The U.S. dollar        edged lower against a basket of major
currencies, while the price of oil, one of Canada's major
exports, was pressured by weak global factory activity that
reinforced fears about slowing growth. U.S. crude oil futures
       fell nearly 1% to $58.53 a barrel.
    Canadian manufacturing activity contracted for the third
consecutive month in June, as a measure of production fell to a
3-1/2-year low, data showed.
    At 10:02 a.m. (1402 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3120 to the greenback, or 76.22 U.S.
cents. The currency, which touched on Friday a near eight-month
high at 1.3060, traded in a range of 1.3109 to 1.3139.
    On Friday, data showing faster-than-expected growth in the
domestic economy in April reduced expectations for an interest
rate cut over the coming months from the Bank of Canada. Money
markets expect much less easing this year from the Bank of
Canada than from the U.S. Federal Reserve.           
    Canada's trade data for May is due on Wednesday and the June
employment report is due on Friday.
    Canadian government bond prices were lower across the yield
curve as the market reopened following the Canada Day holiday.
The two-year            fell 2 Canadian cents to yield 1.485%
and the 10-year             was down 21 Canadian cents to yield
    The 2-year yield touched its highest intraday since May 29
at 1.504%.  

 (Reporting by Fergal Smith; editing by Jonathan Oatis)