By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened to its highest level in nearly six weeks against the greenback, boosted by recent strength in oil prices and domestic data that showed the economy had momentum heading into the second quarter.

Canada's economy was not as robust as expected in the first quarter, growing at an annualized rate of 3.1%. But domestic demand was buoyant and gains for monthly GDP pointed to further growth in the current quarter, reinforcing the likelihood of another half-percentage-point interest rate hike by the Bank of Canada on Wednesday.

"Canadian growth data and rising oil prices offset the delayed reaction in U.S. Treasuries to yesterday's hawkish Fed commentary from Governor Waller," said Jay Zhao-Murray, a market analyst at Monex Canada Inc.

The U.S. Federal Reserve should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed, Fed Governor Christopher Waller said on Monday.

The U.S. 10-year yield jumped by nearly 10 basis points on Tuesday and the U.S. dollar rallied against every G10 currency, with the exception of the loonie.

Canada's currency was up 0.1% at 1.2645 per greenback, or 79.08 U.S. cents, after touching its strongest since April 22 at 1.2630. For the month, the currency advanced 1.7%, its biggest monthly gain since last October.

The price of oil, one of Canada's major exports, climbed to its highest in nearly three months at $119.98 a barrel, before settling lower after a report that some OPEC members were exploring the idea of suspending Russia's participation in an oil-production deal.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries. The 10-year touched its highest since May 19 at 2.930% before dipping to 2.901%, up 7.5 basis points on the day.

(Reporting by Fergal Smith; Editing by Susan Fenton and Marguerita Choy)