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CANADA FX DEBT-C$ pares Monday's decline as greenback rally stalls

* Canadian dollar rises 0.1% against the greenback

* Canadian manufacturing activity contracts for 3rd straight month

* Canadian bond prices dip across the yield curve

* Canada's 2-year yield touches a one-month high at 1.504%

TORONTO, July 2 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday, paring some of Monday's decline, as the boost to the greenback from a weekend trade truce between the United States and China faded.

The U.S. dollar edged lower against a basket of major

currencies, while the price of oil, one of Canada's major exports, was pressured by weak global factory activity that reinforced fears about slowing growth. U.S. crude oil futures fell nearly 1% to $58.53 a barrel. Canadian manufacturing activity contracted for the third consecutive month in June, as a measure of production fell to a 3-1/2-year low, data showed.

At 10:02 a.m. (1402 GMT), the Canadian dollar was

trading 0.1% higher at 1.3120 to the greenback, or 76.22 U.S. cents. The currency, which touched on Friday a near eight-month high at 1.3060, traded in a range of 1.3109 to 1.3139. On Friday, data showing faster-than-expected growth in the domestic economy in April reduced expectations for an interest rate cut over the coming months from the Bank of Canada. Money markets expect much less easing this year from the Bank of Canada than from the U.S. Federal Reserve. Canada's trade data for May is due on Wednesday and the June employment report is due on Friday. Canadian government bond prices were lower across the yield curve as the market reopened following the Canada Day holiday.

The two-year fell 2 Canadian cents to yield 1.485%and the 10-year was down 21 Canadian cents to yield

1.488%. The 2-year yield touched its highest intraday since May 29 at 1.504%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)