CANADA FX DEBT-C$ hits 1-month low as oil prices fall, greenback climbs

* Canadian dollar at C$1.2758, or 78.38 U.S. cents

* Loonie touches its weakest since July 12 at C$1.2778

* Bond prices lower across a steeper yield curve

TORONTO, Aug 15 (Reuters) - The Canadian dollar hit a one-month low against its U.S. counterpart on Tuesday, pressured North Korea tensions eased and data showed a jump in U.S. retail sales.

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

currencies after North Korea's leader delayed a decision on firing missiles towards Guam. Also aiding the greenback, U.S. retail sales recorded their biggest increase in seven months in July. Oil prices extended a heavy sell-off, weighed down by a stronger U.S. dollar and signs of weaker demand in China.

U.S. crude prices were down 0.53 percent to $47.34 a


At 9:17 a.m. ET (1317 GMT), the Canadian dollar was

trading at C$1.2758 to the greenback, or 78.38 U.S. cents, down 0.3 percent. The currency's strongest level of the session was C$1.2720, while it touched its weakest since July 12 at C$1.2778. Resales of Canadian homes fell 2.1 percent in July from June, the fourth straight monthly decline, as the cooling down of the Toronto housing market continued, the Canadian Real Estate Association said. Separate data showed that lending to Canadian small businesses rose for a fifth straight month in June on stronger activity in construction and other major industries, suggesting that companies are adding to solid growth in the domestic economy. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year price fell 7 Canadian cents to yield 1.261 percent,

and the 10-year declined 64 Canadian cents to yield

1.953 percent. Investors are awaiting Canada's inflation data for July on Friday to see whether the numbers will support a potential second interest rate hike from the Bank of Canada later this year. The central bank hiked rates last month for the first time in nearly seven years. Negotiations for modernizing the North American Free Trade Agreement (NAFTA) start on Wednesday. The Canadian government's goals in the talks include preserving NAFTA's dispute-settlement mechanism, Foreign Minister Chrystia Freeland said on Monday, setting up a potential clash with Washington.

(Reporting by Fergal Smith; Editing by W Simon)