* Canadian dollar rises 0.1% against the greenback
* Price of U.S. oil increases 1.3%
* Loonie touches its strongest since Aug. 14 at 1.3225
* Canadian bond prices gain across a flatter yield curve
TORONTO, Aug 27 (Reuters) - The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Tuesday as oil prices rose and investors became more optimistic that the prolonged trade dispute between the United States and China would be resolved.
At 9:53 a.m. (1353 GMT), the Canadian dollar CAD=D4 was trading 0.1% higher at 1.3240 to the greenback, or 75.53 U.S. cents. The currency touched its strongest level since Aug. 14 at 1.3225.
The United States and China sought to ease trade tensions on Monday, with Beijing calling for calm and U.S. President Donald Trump predicting a deal after markets fell in response to new tariffs from both countries. exports many commodities, including oil, so its economy could benefit from an improved outlook for global trade.
U.S. crude CLc1 oil futures were up 1.3% at $54.32 a barrel.
Meanwhile, Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 3 Canadian cents to yield 1.381% and the 10-year CA10YT=RR was up 36 Canadian cents to yield 1.177%.
Canada's gross domestic product data for the second quarter is due on Friday, which could help guide expectations for next week's interest rate decision by the Bank of Canada.
Money markets expect an interest rate cut by the end of the year. BOCWATCH