* Canadian dollar at C$1.3074, or 76.49 U.S. cents
* Loonie touches its strongest since June 14 at C$1.3069
* Bond prices lower across the yield curve
TORONTO, July 9 (Reuters) - The Canadian dollar strengthened to a nearly four-week high against its U.S. counterpart on Monday as oil prices rose and investors braced for a potential interest increase from the Bank of Canada later in the week.
At 9:14 a.m. EDT (1314 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at C$1.3074 to the greenback, or 76.49 U.S. cents. The currency touched its strongest since June 14 at C$1.3069.
The Bank of Canada will hike interest rates on Wednesday as strong job growth and rising inflation pressures override concerns about a deepening trade rift with the United States, a Reuters poll found. markets see a roughly 90-percent chance of a rate increase. Bets for a hike were boosted by domestic data on Friday showing a stronger-than-expected jobs gain. BOCWATCH healthy U.S. jobs data last week has helped investors look past rising trade tensions between the United States and China. exports many commodities, including oil, and runs a current account deficit so its economy could also be hurt if the flow of trade or capital slows.
The country has its own trade feud with the United States and is also in slow-moving talks with the U.S. and Mexico to revamp the North American Free Trade Agreement.
The price of oil was supported by increased global demand and U.S. efforts to shut out Iranian output using sanctions. U.S. crude CLc1 prices were up 0.3 percent at $73.99 a barrel. U.S. dollar .DXY slipped to its lowest in more than three weeks against a basket of major currencies. government bond prices were lower across the yield curve, with the two-year CA2YT=RR down 5.5 Canadian cents to yield 1.942 percent and the 10-year CA10YT=RR falling 28 Canadian cents to yield 2.161 percent.
The gap between the 2-year and 10-year yields steadied at a spread of 21.9 basis points, its narrowest since December 2007.