* Canadian dollar at C$1.2836, or 77.91 U.S. cents
* Canadian economy grows 0.4 percent in February
* Bond prices lower across the yield curve
TORONTO, May 1 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday, as stronger-than-expected domestic economic growth in February offset a drop in oil prices and broader gains for the greenback. The Canadian economy grew 0.4 percent in February, Statistics Canada said, a sign that first-quarter growth could be stronger than the Bank of Canada is predicting. Analysts had forecast February gross domestic product would increase by 0.3 percent. The Bank of Canada has hiked interest rates three times since July. But recent comments by central bank officials have been seen as dovish by some investors. Chances of a hike at the May 30 interest rate announcement have been dialed back to about 25 percent from nearly 50 percent in mid-April, data from the overnight index swaps market showed.
Bank of Canada Governor Stephen Poloz will give a speech on Tuesday to the Yellowknife Chamber of Commerce. The central bank will release his prepared remarks at 2:30 p.m. EDT (1830 GMT). The price of oil, one of Canada's major exports, slid as the U.S. dollar remained near a four-month high. The U.S. dollar surged into positive territory for 2018 and broke past key levels against several currencies as a divergence between growth and the interest rate outlook versus other countries spurred investors to chase the greenback higher.
At 9:20 a.m. EDT (1320 GMT), the Canadian dollar was trading 0.1 percent higher at C$1.2836 to the greenback, or 77.91 U.S. cents. The currency traded in a range of C$1.2822 to C$1.2879. The modest gain for the loonie came as U.S. President Donald Trump postponed the imposition of steel and aluminum tariffs on Canada, the European Union and Mexico until June 1. Temporary exemptions from the tariffs on these countries were set to expire on Tuesday. The latest U.S. proposal for increasing the North American Free Trade Agreement's regional automotive content would carry a four-year phase-in to meet a higher, 75 percent regional value threshold and new labor content rules requiring substantial work at wages of $16 an hour or higher. Canadian government bond prices were lower across the yield
curve, with the two-year down 5 Canadian cents to yield 1.919 percent and the 10-year falling 16
Canadian cents to yield 2.327 percent.
(Reporting by Fergal Smith; editing by Jonathan Oatis)