CANADA FX DEBT-C$ rises to 2-month high on growing signs of easing U.S. inflation

* Canadian dollar strengthens 0.3% against greenback

* Touches strongest level since June 10 at 1.2732

* Price of U.S. oil rises 0.9%

* Canadian bond yields rise across steeper curve

TORONTO, Aug 11 (Reuters) - The Canadian dollar climbed to its highest level in more than two months against a broadly weaker U.S. counterpart on Thursday as oil prices rose and investors weighed further evidence of cooling inflation in the United States.

The S&P 500 index was trading at its highest level in more than three months and the U.S. dollar fell against a basket of major currencies as data showed U.S. producer prices unexpectedly fell in July, feeding hopes of smaller Federal Reserve interest rate hikes.

Sentiment was already upbeat after U.S. data on Wednesday showed consumer prices rose at a slower-than-expected annual pace last month.

Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to risk appetite.

U.S. crude prices were up 0.9% at $92.74 a barrel after the International Energy Agency raised its oil demand growth forecast for this year, with soaring gas prices driving some consumers to switch to oil.

The Canadian dollar was trading 0.3% higher at 1.2734 per greenback, or 78.53 U.S. cents, after touching its strongest level since June 10 at 1.2732.

Canadian government bond yields were higher across much of a steeper curve, with the 10-year up 3.4 basis points at 2.709%. (Reporting by Fergal Smith; Editing by Paul Simao) ((fergal.smith@thomsonreuters.com; +1 647 480 7446;)) Keywords: CANADA FOREX/

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