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CANADA FX DEBT-C$ firms as current account deficit hits narrowest in 11 years

* Canadian dollar rises 0.1% against the greenback

* Canada's Q2 current account deficit narrows to C$6.38 billion

* Price of U.S. oil increases nearly 1%

* Canadian bond prices edge higher across the yield curve

TORONTO, Aug 29 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Thursday as oil prices rose and data showed that the country's current account deficit was the lowest in the second quarter since 2008. Canada's current account deficit narrowed to C$6.38 billion in the second quarter from a revised C$16.63 billion deficit in the first quarter, on a lower deficit on goods, Statistics Canada said. Analysts had forecast a deficit of C$9.80 billion.

Meanwhile, U.S. stocks rose as China sounded hopeful of a resolution to the long-standing trade dispute with the United states. Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for global trade. The price of oil was supported by a sharp fall in U.S.

inventories. U.S. crude prices were up nearly 1% at

$56.31 a barrel.

At 9:43 a.m. (1343 GMT), the Canadian dollar was

trading 0.1% higher at 1.3297 to the greenback, or 75.20 U.S. cents. The currency traded in a range of 1.3274 to 1.3319. Canada's gross domestic product data for the second quarter is due on Friday, which could help guide expectations for next week's Bank of Canada interest rate decision. Analysts project that the economy grew by 3%, recovering after a slowdown around the turn of the year. Canadian government bond prices were higher across the yield

curve, with the two-year up 0.5 Canadian cent toyield 1.327% and the 10-year rising 10 Canadian

cents to yield 1.112%. Earlier this month, the 10-year yield hit its lowest since October 2016 at 1.083%.

(Reporting by Fergal Smith; Editing by Andrea Ricci)