* Canadian dollar at C$1.2492, or 80.05 U.S. cents
* Bond prices higher across a flatter yield curve
TORONTO, Oct 11 (Reuters) - The Canadian dollar edged higher on Wednesday against its U.S. counterpart as oil prices rose and the greenback dipped against a basket of major currencies.
At 9:24 a.m. ET (1324 GMT), the Canadian dollar CAD=D4 was trading at C$1.2492 to the greenback, or 80.05 U.S. cents, its strongest level of the day. It was up 0.2 percent.
The currency's weakest level of the day was C$1.2530. It had touched on Friday its weakest in five weeks at C$1.2600.
Prices of oil, one of Canada's major exports, rose for a third day as the Organization of the Petroleum Exporting Countries said the market was gradually tightening after years of oversupply, but that the 2018 outlook was less certain. crude CLc1 prices were up 0.35 percent at $51.10 a barrel.
Uncertainty that President Donald Trump would push through his planned tax reforms pressured the U.S. dollar .DXY , while relief that Catalonia had stopped short of formally declaring independence from the rest of Spain boosted the euro. loonie got a boost on Tuesday from domestic housing starts data that showed less softening than investors had expected, while data on Friday showing a pickup in wages calmed worries that the economy will slow in the second half of the year.
But renegotiation of the North American Free Trade Agreement, under which Canada sends about 75 percent of its exports to the United States, could weigh on the currency.
New U.S. demands are set to hit NAFTA negotiating tables on Wednesday, threatening to push modernization talks toward collapse as Canadian Prime Minister Justin Trudeau again tries to convince Trump of the trade pact's merits. government bond prices were higher across a flatter yield curve, with the two-year CA2YT=RR up 0.5 Canadian cent to yield 1.546 percent and the 10-year CA10YT=RR rising 15 Canadian cents to yield 2.106 percent.