June 13 (Reuters) - Canada's main stock index rose on Tuesday to its highest closing level in one week as higher oil prices boosted energy shares and data showing slower U.S. inflation bolstered risk appetite ahead of a Federal Reserve interest rate decision.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 69.09 points, or 0.35%, at 19,990.40, its highest closing level since last Tuesday.

"The major reason for the rally is slowing inflation in the U.S.," said Lorne Steinberg, president, Lorne Steinberg Wealth Management Inc.

"Despite the fact that the Bank of Canada raised rates last week, anything that leads investors to hope that we are very close to the end of this rate rising cycle is the most bullish thing in the world."

Wall Street also climbed on Tuesday after data showed consumer prices rose modestly in May, boosting bets that the Fed will leave interest rates on hold at the end of its policy meeting on Wednesday.

The energy sector rose 1.1% as the price of oil settled 3.4% higher at $69.42 a barrel. The move up in oil came as China's central bank moved to stimulate the local economy.

Heavily-weighted financials rose 0.9% even as Canada's financial regulator said in a statement to Reuters that it is urging lenders to tackle risks from mortgage extensions at the "earliest opportunity."

Among the stocks posting strong gains was Teck Resources Ltd (TECKb.TO). Its shares advanced 2.6% as Nippon Steel (5401.T) said it remains interested in investing in the company's steelmaking coal assets.

Reporting by Fergal Smith in Toronto and by Ankika Biswas in Bengaluru; Editing by Shweta Agarwal and Alistair Bell

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