* Canadian dollar at C$1.3043, or 76.67 U.S. cents
* Price of U.S. oil falls 0.2 percent
* Bond prices higher across flatter yield curve
By Fergal Smith
TORONTO, Aug 9 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as oil prices fell and the greenback broadly rose, while investors turned attention to Canada's jobs report on Friday.
At 3:15 p.m. EDT (1915 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at C$1.3043 to the greenback, or 76.67 U.S. cents. The currency traded in a range of C$1.3001 to C$1.3064.
The loonie was buffeted on Wednesday by a diplomatic dispute between Canada and Saudi Arabia, hitting a two-week low at C$1.3121. But it recovered as investors decided that potential Canadian asset sales by Saudi Arabia will have a short-lived impact on the currency.
A dispute over human rights in Saudi Arabia will not have any impact on Saudi oil supplies to Canada, its energy minister said. big headlines on Canada and Saudi Arabia are much more noise than anything else," said Rahim Madhavji, president of Knightsbridge Foreign Exchange. "The focus is on the (jobs) data."
The July employment report could help guide expectations for further Bank of Canada interest rate increases after the central bank hiked rates in July for the fourth time in a year.
Money markets expect the Bank of Canada to raise its benchmark interest rate, which is at 1.50 percent, once more by December. BOCWATCH
Canada's dollar will rise over the coming year as the Bank of Canada hikes interest rates and higher oil prices become more supportive of the currency, a Reuters poll showed, but it will take a deal on the North American Free Trade Agreement to trigger bigger gains. economy minister said the country needed to finish bilateral negotiations with the United States, possibly this week or next, before Canada rejoins talks over a revamped NAFTA. U.S. dollar .DXY gained against most major currencies as investors bet that trade tensions and a strong U.S. economy would continue to aid the currency. crude oil futures CLc1 , which fell heavily on Wednesday, settled 0.2 percent lower at $66.81 a barrel. Oil is one of Canada's major exports.
In domestic data, new housing prices rose by 0.1 percent in June and seasonally adjusted housing starts fell to 206,314 in July. government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries as U.S. data showed producer prices were unchanged in July. 10-year CA10YT=RR climbed 19 Canadian cents to yield 2.338 percent.