CANADA FX DEBT-C$ dips with Wall Street but gains 1.4 pct on week

(New throughout, updates prices and market activity, adds dealer comments)

* Canadian dollar at C$1.2606, or 79.33 U.S. cents

* Loonie climbs 1.4 percent for the week

* Bond prices rise across the yield curve

* 10-year yield touches highest intraday since March 21

TORONTO, April 13 (Reuters) - The Canadian dollar edged lower on Friday against its U.S. counterpart as Wall Street dipped, but the currency was up 1.4 percent for the week as investors were optimistic a deal will be reached to expand a major oil pipeline.

At 4 p.m. EDT (2000 GMT), the Canadian dollar was

trading 0.1 percent lower at C$1.2606 to the greenback, or 79.33 U.S. cents. The currency traded in a range of C$1.2553 to C$1.2617. On Wednesday, the loonie touched its strongest in more than seven weeks at C$1.2545. "We were probably due for a modest pullback," said Blake Jespersen, managing director, foreign exchange sales at BMO Capital Markets. "But with some of the positive talk around a potential NAFTA deal being agreed to shortly and with some of the positive tone, at least coming from (Finance Minister Bill) Morneau and (Prime Minister Justin) Trudeau, on supporting the Trans Mountain pipeline, investors are now looking at the Canadian dollar as having more room to appreciate." Trudeau is due to meet the premiers of Alberta and British Columbia on Sunday to discuss the pipeline. U.S. trade negotiators have significantly softened their demands to increase regional automotive content under a reworked North American Free Trade Agreement, auto industry executives said. Financial stocks led a drop on Wall Street as results from big banks failed to enthuse and geopolitical tensions in Syria and Russia further unnerved investors. Canada's commodity-linked currency tends to track movement in stocks due to the signals that market may send about prospects for economic growth. The price of oil, one of Canada's major exports, rose to its highest in more than three years. U.S. crude oil futures settled 0.5 percent higher at $67.39 a barrel. The Bank of Canada is likely to raise interest rates twice more this year as the economy regains momentum in the current quarter but will hold them steady at its April 18 meeting, according to a Reuters poll of economists. Speculators have trimmed slightly bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of April 10, net short positions had fallen to 31,672 contracts from 31,872 a week earlier. Canadian government bond prices were higher across the yield

curve, with the 10-year rising 35 Canadian cents to

yield 2.24 percent. The 10-year yield touched its highest intraday since March 21 at 2.288 percent.

(Reporting by Fergal Smith; Editing by Bernadette Baum and David Gregorio)