CANADA FX DEBT-Loonie nudges higher as oil rallies on Middle East tensions

* Canadian dollar rises 0.1% against the greenback

* Price of U.S. oil climbs 1.3%

* Canadian producer prices rise by 0.1% in November

* Canadian bond prices gain across a flatter yield curve

TORONTO, Jan 6 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Monday as Middle East tensions boosted oil prices and the greenback broadly fell, but the loonie traded in a narrow range, stopping short of a 14-month high it posted last week. The price of oil, one of Canada's major exports, rose as investors fretted that the killing of Iran's most prominent military commander by the United States could trigger a broader Middle East conflict.

U.S. crude oil futures were up 1.30% at $63.87 abarrel, while the U.S. dollar declined against a basket

of major currencies.

At 9:19 a.m. (1419 GMT), the Canadian dollar was

trading 0.1% higher at 1.2981 to the greenback, or 77.04 U.S. cents. The currency, which strengthened 0.7% last week, traded in a range of 1.2965 1.2990. Last Tuesday, the loonie touched its strongest intraday level since October 2018 at 1.2952. The commodity-linked currency has been bolstered in recent weeks by easing of the trade dispute between the United States and China and signs of recovery in the global economy. Producer prices in Canada grew by 0.1% in November from October on higher prices for meat, fish and dairy products, as well as energy and petroleum products, Statistics Canada said.

Canada's trade data for November is due on Tuesday and December jobs data is due on Friday, both of which could help guide expectations for the Bank of Canada interest rate outlook. Bank of Canada Governor Stephen Poloz is due to speak on Thursday. The central bank left its benchmark interest rate on hold at 1.75% in 2019 even as some other major central banks, such as the Federal Reserve and the European Central Bank, eased. Canadian government bond prices were higher across a flatter

yield curve on Monday. The two-year rose 1.5 Canadiancents to yield 1.604% and the 10-year gained 21

Canadian cents to yield 1.512%, its lowest yield since Dec. 4, 2019.

(Reporting by Fergal Smith Editing by Nick Zieminski)