Canadian dollar nudges higher as bond yields climb

* Canadian dollar strengthens 0.1% against the greenback

* Canadian payroll employment increases 59,700 in August

* Price of U.S. oil falls 0.2%

* Canadian bond yields rise across the curve

TORONTO, Oct 28 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Thursday and Canadian bond yields rose, adding to moves from the previous day when the Bank of Canada signaled an earlier start to interest rate hikes.

The BoC on Wednesday signaled it could hike interest rates as soon as April 2022 and ended its bond-buying program, citing Canada's robust economic growth, high COVID-19 vaccination rates, and strong employment gains.

Canadian payroll employment increased by 59,700 in August, driven by gains in the services-producing sector in Ontario and Quebec, Statistics Canada said.

The Canadian dollar CAD= was trading 0.1% higher at 1.2340 to the greenback, or 81.04 U.S. cents, after trading in a range of 1.2339 to 1.2382.

Gains for the loonie came as corporate earnings results gave Wall Street a boost.

But the price of oil, one of Canada's major exports, declined 0.2% to $82.50 a barrel after Iran said talks with world powers on its nuclear programme would resume by the end of November and U.S. crude inventories rose by much more than expected.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries and German Bunds as ECB President Christine Lagarde said she expects the central bank's pandemic-era asset-purchase program to end in March.

The 2-year yield CA2YT=RR touched its highest level since February 2020 at 1.262% before dipping to 1.149%, up 7.3 basis points on the day, while the 10-year yield was up 7.7 basis points at 1.696%.
Reporting by Fergal Smith; Editing by Andrea Ricci

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