* Canadian dollar at C$1.2862, or 77.75 U.S. cents
* Price of oil rises 1.9 percent
* Loonie falls 0.3 percent on the week
* Bond prices little changed across yield curve
By Fergal Smith
TORONTO, May 4 (Reuters) - The Canadian dollar weakened to a one-month low against a broadly firmer greenback on Friday, but the sell-off lost momentum as oil prices climbed and domestic data pointed to a strengthening of economic activity.
The U.S. dollar .DXY climbed against a basket of major currencies after briefly dropping on disappointing U.S. employment data for April. price of oil, one of Canada's major exports, rose to its highest in more than three years as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran. crude oil futures CLc1 settled 1.9 percent higher at $69.72 a barrel.
The pace of purchasing activity in Canada accelerated in April as prices climbed, according to Ivey Purchasing Managers Index data. The seasonally adjusted index jumped to 71.5 from 59.8 in March. have raised bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of May 1, net short positions had increased to 27,535 contracts from 25,144 a week earlier.
At 4 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent lower at C$1.2862 to the greenback, or 77.75 U.S. cents.
The currency touched its weakest since April 3 at C$1.2918. For the week it declined 0.3 percent.
Friday's modest loss for the loonie came as the Trump administration drew a hard line in trade talks with China. commodity-linked economy could be hurt if the trade spat between the two economic giants slows global growth.
Canadian government bond prices were little changed across the yield curve, with the two-year CA2YT=RR flat to yield 1.91 percent and the 10-year CA10YT=RR falling 4 Canadian cents to yield 2.329 percent.