* Canadian dollar at C$1.2831, or 77.94 U.S. cents
* Price of oil rises 0.6 percent
* Bond prices higher across the yield curve
* 10-year yield touches highest intraday since Feb. 15
TORONTO, April 26 (Reuters) - The Canadian dollar strengthened slightly against its U.S. counterpart on Thursday as oil prices climbed and domestic data showed rising employee earnings.
The price of oil, one of Canada's major exports, was supported by expectations of renewed U.S. sanctions on Iran, declining output in Venezuela and continuing strong demand. crude CLc1 prices were up 0.6 percent at $68.45 a barrel.
Canadian average weekly earnings of non-farm payroll employees rose 3.4 percent in February from the same month last year, led by the accommodations and food services sectors, Statistic Canada said.
Bank of Canada Governor Stephen Poloz has said that he expects wages to pick up as job vacancies continue to grow and for more people to be then encouraged to enter the workforce. Wednesday, Poloz said the economy was "finally positive" after a long adjustment to a sharp fall in oil prices, but he added there was still softness in several areas of the country. 9:04 a.m. EDT (1304 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at 1.2831 to the greenback, or 77.94 U.S. cents.
The currency traded in a narrow range of C$1.2823 to C$1.2864. On Wednesday, the loonie touched C$1.2897, its weakest in more than three weeks.
Modest gains for the loonie came amid signs of progress on a deal to revamp the North American Free Trade Agreement, which could benefit Canada's economy because of the high proportion of the country's exports that go to the United States.
Canadian Foreign Minister Chrystia Freeland said on Wednesday that good progress has been made at the NAFTA trade talks on the key issue of auto rules, though the threat of proposed U.S. steel and aluminum tariffs coming into force next week clouded the mood. government bond prices were higher across the yield curve in sympathy with U.S. Treasuries as data showed a drop in U.S. domestic core capital good orders in March.
The two-year CA2YT=RR rose 4.3 Canadian cents in price to yield 1.909 percent and the 10-year CA10YT=RR climbed 27.3 Canadian cents to yield 2.356 percent.
Still, the 10-year yield touched its highest intraday since Feb. 15 at 2.379 percent.