CANADA FX DEBT-Canadian dollar rises slightly ahead of Iran deadline

* Canadian dollar gains 0.1% against the greenback

* Trades in a range of 1.3892 to 1.3929

* Ivey PMI falls to 49.7 in March

* Bond yields rise across the curve

By Fergal Smith

TORONTO, April 7 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Tuesday but the move was restrained after the release of downbeat domestic data and as investors awaited a U.S. deadline for Iran to end its blockade of Gulf oil.

The loonie was trading 0.1% higher at 1.3900 per U.S. dollar, or 71.94 U.S. cents, after moving in a range of 1.3892 to 1.3929. Last Tuesday, the currency touched a near four-month low at 1.3966.

Global markets have entered a period of heightened uncertainty ahead of the 8 p.m. ET (0000 GMT) deadline set by U.S. President Donald Trump, with investors weighing outcomes ranging from a ceasefire to renewed military escalation and their implications for oil, currencies and risky assets.

"The Canadian dollar is helped by the higher energy prices but so is the U.S., and the U.S., I think, is more insulated from the shock compared to Canada," said Aaron Hurd, senior portfolio manager in the currency group at State Street Global Advisors.

"We've seen that weakness over the past few weeks in the Canadian dollar versus the U.S. and I think we'd reverse some amount of that pretty quickly if we have a deal. If we don't have a deal and it escalates - it's kind of more of the same." The price of oil, one of Canada's major exports, settled 0.5% higher at $112.95 a barrel. Investors globally have worried that higher energy prices could raise inflation and upend economic growth.

Canadian economic activity contracted in March for the first time in four months as a measure of price pressures increased, Ivey Purchasing Managers Index data showed. The seasonally adjusted index fell to 49.7 last month from 56.6 in February.

Canada's employment report for March, due on Friday, could offer additional clues on the state of the domestic economy. Economists expect a jobs gain of 15,000 after the economy shed 84,000 jobs in February.

Canadian bond yields moved higher across the curve, with the 10-year up 4.6 basis points at 3.515%. (Reporting by Fergal Smith Editing by Rod Nickel)