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CANADA FX DEBT-C$ rebounds from 4-week low as greenback slips

* Canadian dollar at C$1.2680, or 78.86 U.S. cents

* Loonie touches its weakest since July 13 at C$1.2753

* Bond prices mixed across a steeper yield curve

TORONTO, Aug 11 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday, recovering from an earlier four-week low as softer-than-expected U.S. inflation data pressured the greenback.

The U.S. dollar fell against a basket of major

currencies after data showed consumer prices rose less than expected in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.

At 9:00 a.m. ET (1300 GMT), the Canadian dollar was

trading at C$1.2680 to the greenback, or 78.86 U.S. cents, up 0.5 percent. The currency's strongest level of the session was C$1.2653. But it touched its weakest since July 13 at C$1.2753 and was on track to fall 0.2 percent for the week. Prices of oil, one of Canada's major exports, fell to their lowest in more than a week after the International Energy Agency said market rebalancing was taking time despite strong demand growth due to weak Organization of the Petroleum Exporting Countries compliance with output cuts.

U.S. crude prices were down 0.31 percent at $48.44 a

barrel. U.S. President Donald Trump issued a new threat to North Korea, saying American weapons were "locked and loaded" as Pyongyang accused him of driving the Korean Peninsula to the brink of nuclear war. As a major commodity producer, Canada could be hurt if geopolitics hamper global trade. Canadian government bond prices were mixed across a steeper

yield curve, with the two-year flat to yield 1.221 percent and the 10-year falling 13 Canadian cents to

yield 1.867 percent. Next week, Canadian Foreign Minister Chrystia Freeland will testify to a Parliamentary committee on Monday about the government's negotiating position heading into talks on recrafting the North American Free Trade Agreement.

(Reporting by Fergal Smith; Editing by Meredith Mazzilli)