(Adds strategist quotes and details throughout; updates prices) * Canadian dollar strengthens 0.4% against greenback * Price of U.S. oil settles nearly 1% higher * Canadian bond yields rise across a steeper curve By Fergal Smith TORONTO, May 27 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, moving closer to a recent 6-year high, as oil prices rose and investors awaited U.S. inflation data on Friday that could provide clues on the Federal Reserve"s policy outlook. The price of oil, one of Canada"s major exports, settled nearly 1% higher at $66.85 a barrel as strong U.S. economic data offset investors" concerns about the potential for a rise in Iranian supplies. "As the pandemic recedes, and the global economy reopens, Canada will be in a good spot to benefit from commodity and oil prices that are expected to remain firm going forward," said Ronald Simpson, managing director, global currency analysis at Action Economics. "USD-CAD remains in sell-the-rally mode," Simpson added. The Canadian dollar was trading 0.4% higher at 1.2066 to the greenback, or 82.88 U.S. cents. Last week, it touched its strongest level since May 2015 at 1.2013, helped by the Bank of Canada"s shift in April to a more hawkish stance. The central bank is likely to cut its bond-buying program again this year, possibly as soon as July, as provinces ease curbs to contain the coronavirus pandemic and inflation pressures build, analysts said. Economists expect data on Friday to show U.S. core PCE (personal consumption expenditures) prices jumping in April. Fed officials have downplayed concerns about inflation prompting a knee-jerk policy response but some have acknowledged that the time to talk about policy changes might be approaching. Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries after a report saying President Joe Biden will announce on Friday a $6-trillion budget for 2022. Canada"s 10-year bond yield rose 3.9 basis points to 1.489%, having rebounded from its lowest intraday level since mid-April on Wednesday at 1.444%. (Reporting by Fergal Smith; editing by Emelia Sithole-Matarise) Our Standards: The Thomson Reuters Trust Principles.