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CANADA FX DEBT-C$ edges higher against greenback, holds in recent range

Karen Brettell

(Adds quote, updates prices)

* Improving risk appetite provides modest support to loonie

* Canadian bond yields rise slightly

NEW YORK, Aug 26 (Reuters) - The Canadian dollar edged higher against the greenback on Monday as risk sentiment improved, but held in the middle of its tight recent range as investors continued to focus on the fallout of the U.S.-China trade war. The United States and China sought to ease tensions on Monday, with Beijing calling for calm and U.S. President Donald Trump predicting a trade deal after markets fell in response to new tariffs from both countries. That boosted risk sentiment, sending stock prices higher, and gave a modest boost to the Canadian currency. Ongoing concerns about the trade dispute, however, may cap further gains. Canada exports many commodities, including oil, so its economy could be hurt by a slowdown in the flow of global trade. "The rekindling in risk aversion in global markets should, while it persists, underpin USD-CAD," analysts at Action Economics said in a report on Monday.

The Canadian dollar was last up 0.14% at 1.3260 to

the greenback. It has held between 1.3248 and 1.3344 since Aug. 15.

Ten-year Canadian bond yields rose to 1.21% from

1.17% late on Friday.

(Reporting by Karen Brettell; editing by Jonathan Oatis and Tom Brown)