CANADA FX DEBT-C$ dips, pressured by surprise rate cut speculation

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar falls 0.1% against the greenback
    * Price of U.S. oil increases 1.6%
    * Canadian bond prices trade mixed across the yield curve

    By Fergal Smith
    TORONTO, Aug 28 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday, extending its
pullback from a near two-week high the previous day, as
investors mulled the prospect of a surprise interest rate cut
next week from the Bank of Canada.    
    At 3:59 p.m. (1959 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3304 to the greenback, or 75.17 U.S.
cents. The currency, which notched on Tuesday its strongest
intraday level since Aug. 14 at 1.3225, traded in a range of
1.3282 to 1.3319.
    "There was a lot of chatter overnight about a surprise rate
cut next week by the Bank of Canada," said Tony Valente, a
senior FX dealer at AscendantFX. "I don't know if it is
    The Bank of Canada has stayed on the sidelines in recent
months even as other central banks, such as the Federal Reserve,
have eased interest rates.
    Gross domestic product data, due on Friday, is expected to
confirm that Canada's economy rebounded after a slowdown around
the turn of the year. Analysts project second-quarter growth of
    The price of oil, one of Canada's major exports, rose after
a larger-than-expected decline in U.S. crude stockpiles helped
ease worries about weakening oil demand caused by the trade war
between the United States and China. U.S. crude oil futures
settled 1.6% higher at $55.78 a barrel.                 
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 1 Canadian cent to yield
1.333% and the 10-year             falling 6 Canadian cents to
yield 1.131%.
    Earlier this month, the 10-year yield hit its lowest since
October 2016 at 1.083%.

 (Reporting by Fergal Smith; Editing by David Gregorio and Grant