CANADA FX DEBT-C$ firms as domestic housing construction stays "rock solid"

    * Canadian dollar rises 0.1% against the greenback
    * Canadian housing starts rise 1.9% in August
    * The price of U.S. oil rises 0.8%
    * Canada's 10-year yield touches a near six-week high at

    TORONTO, Sept 10 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday, approaching a
near six-week high reached the previous day, as oil prices rose
and domestic data showed a surprise increase in housing starts.
    At 9:15 a.m. (1315 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3162 to the greenback, or 75.98 U.S.
cents. The currency, which on Monday notched its strongest since
July 31 at 1.3140, traded in a range of 1.3161 to 1.3191.     
    The seasonally adjusted annualized rate of housing starts
rose to 226,639 units from a revised 222,467 in July, the
Canadian Mortgage and Housing Corporation (CMHC) said.
Economists had expected starts to fall to 215,000 units.
    Separate data from Statistics Canada showed that the value
of Canadian building permits rose by 3.0% in July from June.
    "The construction side of the Canadian housing market still
looks rock solid," Robert Kavcic, a senior economist at BMO
Capital Markets, said in a note.
    Amid signs of firm domestic economic activity, the Bank of
Canada last week left its benchmark interest rate unchanged at
1.75%. The central bank has sat on the sidelines this year even
as some of its major peers, including the U.S. Federal Reserve,
have cut rates.
    Meanwhile, the price of oil, one of Canada's major exports,
was boosted by optimism that OPEC and other producing countries
may agree to extend output cuts to support prices. U.S. crude
oil futures        were up 0.8% at $58.29 a barrel.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 2.5 Canadian cents to yield 1.565% and the 10-year
            was down 20 Canadian cents to yield 1.372%.
    The 10-year yield touched its highest intraday level since
Aug. 2 at 1.384%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)