* Canadian dollar rises 0.1% against the greenback
* For the week, the loonie was up 0.5%
* Price of U.S. oil increases 0.8%
* Canadian government bond prices fall across the yield curve
By Fergal Smith
TORONTO, Oct 25 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday, adding to this week's gain as oil prices rose and investors looked for the Bank of Canada to stick to its divergent path from other central banks.
Canada's central bank is expected to leave its benchmark interest rate unchanged at 1.75% at a rate decision next Wednesday and through the rest of the year, a Reuters poll showed. next Wednesday, the U.S. Federal Reserve is seen easing for the third time since July. That could lower the range for the Fed's benchmark rate below the Bank of Canada's equivalent rate for the first time since December 2016.
"What stands out is that everybody else is easing and the BoC is not," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
The European Central Bank, the Reserve Bank of Australia and the Reserve Bank of New Zealand are among other central banks to have eased monetary policy this year.
The divergence in policy and the rally this week in the price of oil, one of Canada's major exports, have been positive for the Canadian dollar, Anderson said.
Oil prices rose as support from falling U.S. crude inventories, optimism over a U.S.-China trade deal and possible action from OPEC and its allies to extend output cuts outweighed broader economic concerns. U.S. crude oil futures CLc1 settled 0.8% higher at $56.66 a barrel.
At 3:17 p.m. (1917 GMT), the Canadian dollar CAD=D4 was trading 0.1% higher at 1.3061 to the greenback, or 76.56 U.S. cents. The currency, which posted on Thursday its strongest intraday level in more than three months at 1.3053, traded in a narrow range of 1.3058 to 1.3077.
For the week, the loonie was up 0.5%.
The gain this week for the loonie came as Canadian Prime Minister Justin Trudeau's Liberal party won Monday's federal election but lost its majority in Parliament.
Trudeau has since promised to continue with the Trans Mountain pipeline expansion, which could get more of Canada's oil to international markets and to prioritize a tax cut for the middle class. government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 5.5 Canadian cents to yield 1.66% and the 10-year CA10YT=RR was down 13 Canadian cents to yield 1.537%.