CANADA FX DEBT-C$ gains as hot core inflation stokes rate hike bets

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* Canadian dollar strengthens 0.1% against greenback * Average of Bank of Canada's core inflation measures up * Price of U.S. oil falls 0.3% * Canadian bond yields rise across curve TORONTO, Aug 16 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday as investors raised bets on a supersized interest rate hike by the Bank of Canada next month after domestic data showed rising underlying inflation pressures. Canada's annual inflation rate slowed to 7.6% in July as gasoline prices eased, but that was still far above the Bank of Canada's 2% target, while the average of the Bank of Canada's three core measures ticked up to 5.3% from 5.2%, data from Statistics Canada showed. Money markets priced in 56 basis points of tightening by the central bank at its next policy announcement on Sept. 7, up from 53 basis points before the data. The Canadian dollar was up 0.1% at 1.2887 to the greenback, or 77.60 U.S. cents, after trading in a range of 1.2882 to 1.2928. On Monday, it touched its weakest level in one week at 1.2934. The price of oil, one of Canada's major exports, seesawed as the market awaited clarity on talks to revive a deal that could allow more Iranian oil exports and after bleak economic data from China raised fears about the demand outlook. U.S. crude prices were down 0.3% at $89.17 a barrel. Canadian government bond yields were higher across the curve, with the 2-year jumping 9.8 basis points to 3.307% and the 10-year up 5.7 basis points at 2.752%. (Reporting by Fergal Smith Editing by Mark Heinrich)