* Canadian dollar at C$1.3517, or 73.98 U.S. cents
* Loonie touches its strongest since April 24 at C$1.3457
* Longer term bond prices mostly lower across the yield curve
By Solarina Ho
TORONTO, May 23 (Reuters) - The Canadian dollar eased modestly against its U.S. counterpart on Tuesday after notching a nearly one-month high earlier in the session, as the greenback bounced from recent lows on expectations of a U.S. interest rate hike in June.
Traders were also awaiting the U.S. Federal Reserve's latest policy-setting meeting minutes, due to be released on Wednesday, for further clues on what the central bank may do at its June meeting.
In Canada, the Bank of Canada is widely expected to hold interest rates at 0.50 percent on Wednesday.
At 4:00 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading at C$1.3517 to the greenback, or 73.98 U.S. cents, down 0.1 percent.
The currency's weakest level of the session was C$1.3525, while it touched its strongest level since April 24 at C$1.3457.
The U.S. dollar had been under pressure due to concerns that U.S. President Donald Trump's economic stimulus plans would be delayed amid political worries surrounding the administration.
The dollar index .DXY , which tracks the U.S. currency against six major rivals, was on track for its best day in two weeks.
Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets said the U.S. dollar's recent struggles have helped the Canadian dollar.
"I think that in the U.S. the Fed will become a little bit more important as we go forward ... I can't see the U.S. dollar getting much weaker from here," he said.
Chandler says the loonie is likely to weaken again as the Bank of Canada maintains a cautious tone in contrast to the Fed and amid ongoing worries about an overheated Canadian housing market. He expects the currency to trade around C$1.37 in the second half of 2017, retreating to about C$1.40 by the end of the year.
Speculators have ramped up bearish bets on the Canadian dollar to a record high, data from the Commodity Futures Trading Commission and Reuters calculations showed on Friday. Canadian dollar net short positions rose to 98,000 contracts as of May 16 from 86,215 a week earlier. government bond prices were mixed across the yield curve with longer term bond prices falling as the market reopened following the Victoria Day holiday on Monday.
The two-year CA2YT=RR price was down 5.5 Canadian cents to yield 0.703 percent, and the 10-year CA10YT=RR fell 38 Canadian cents to yield 1.513 percent.