CANADA FX DEBT-C$ hovers below 7-week high as oil rises on Syria tensions

* Canadian dollar at C$1.2616, or 79.26 U.S. cents

* Price of U.S. crude oil rises 0.6 percent

* Bond prices mixed across the yield curve

TORONTO, April 11 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday but held near a seven-week high reached the day before, as investors weighed the potential impact of a confrontation between the United States and Russia over Syria. U.S. President Donald Trump warned Russia of imminent military action in Syria over a suspected poison gas attack, declaring that missiles "will be coming" and lambasting Moscow for standing by Syrian President Bashar Assad. Global stocks fell but the price of oil, one of Canada's major exports, rose to its highest in more than three years.

U.S. crude prices were up 0.6 percent at $65.92 a

barrel. At 8:58 a.m. EDT (1258 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2616 to the greenback, or 79.26 U.S. cents. The currency's strongest level of the session was C$1.2591, while its weakest was C$1.2623. On Tuesday, the loonie touched its strongest since Feb. 20 at C$1.2588, bolstered by easing investor concerns about an escalating U.S.-China trade row. The currency has also benefited recently from an upbeat business survey from the Bank of Canada, stronger-than-expected domestic jobs data and investor optimism over a deal to revamp the North American Free Trade Agreement. Canadian government bond prices were mixed across the yield

curve, with the two-year down 2 Canadian cents to yield 1.807 percent and the 10-year rising 1

Canadian cent to yield 2.141 percent. The gap between the 10-year yield and its U.S. equivalent narrowed by 4.4 basis points to a spread of -61.2 basis points as Treasuries were boosted by demand for safe-haven assets.

(Reporting by Fergal Smith; Editing by David Gregorio)