* Canadian dollar at C$1.3275, or 75.33 U.S. cents * Bond prices lower across a flatter yield curve * 2-year spread vs U.S. Treasuries narrowest in 3-1/2 months TORONTO, June 15 The Canadian dollar weakened against its U.S. counterpart on Thursday, paring some of this week's gains as lower oil prices and broader strength in the greenback offset stronger-than-expected domestic manufacturing data. Canadian manufacturing sales rose more than expected to a record level in April as sales of petroleum and coal products rebounded after two months of declines, data from Statistics Canada showed. The 1.1 percent advance topped economists' forecast for a gain of 0.7 percent. Prices of oil dropped to six-week lows, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts. U.S. crude prices were down 0.56 percent at $44.48 a barrel. The U.S. dollar rose against a basket of major currencies, supported by the Federal Reserve's decision on Wednesday to boost interest rates further. At 9:25 a.m. ET (1325 GMT), the Canadian dollar was trading at C$1.3275 to the greenback, or 75.33 U.S. cents, down 0.3 percent. The currency traded in a range of C$1.3226 to C$1.3293. On Wednesday, the loonie touched its strongest in 3-1/2 months at C$1.3165. It has gained 1.5 percent this week, helped by signals from the Bank of Canada that higher interest rates lie ahead. Chances of a rate hike this year have surged to more than 90 percent from less than one-in-four before stronger-than-expected jobs data on Friday. The central bank, which had long said interest rates are too blunt a tool to tackle the country's housing market, may have finally decided to act and at least limit its role in fueling a potential bubble with low interest rates. Resales of Canadian homes dropped 6.2 percent in May from April as Toronto sales plunged 25.3 percent in the month as new housing policy changes sideswiped demand and new listings rose again, the Canadian Real Estate Association said. Canadian government bond prices were lower across a flatter yield curve, with the two-year down 9 Canadian cents to yield 0.926 percent and the 10-year falling 20 Canadian cents to yield 1.513 percent. The gap between the 2-year yield and its U.S. equivalent narrowed by 3.1 basis points to a spread of -43.5 basis points, its smallest since Feb. 27. (Reporting by Fergal Smith; Editing by Bernadette Baum)