CANADA FX DEBT-C$ strengthens to five-week high as oil extends rally
* Canadian dollar at C$1.2674, or 78.90 U.S. cents * Bond prices slightly higher across maturity curve * Loonie touches its strongest level since May 3 TORONTO, June 8 (Reuters) - The Canadian dollar strengthened to a five-week high against its broadly weaker U.S. counterpart on Wednesday as oil prices climbed further above $50 a barrel. Oil was trading at its highest level in eight months on supply disruptions in Nigeria and strong Chinese demand data. U.S. crude prices were up 1.67 percent to $51.2 a barrel. A weaker U.S. dollar added to gains for the loonie. The greenback hit a one-month trough against a basket of major currencies, hurt by waning expectations that the Federal Reserve will raise interest rates anytime soon. At 9:47 a.m. EDT (1347 GMT), the Canadian dollar was trading at C$1.2674 to the greenback, or 78.90 U.S. cents, stronger than Tuesday's close of C$1.2771, or 78.30 U.S. cents. The currency's weakest level of the session was C$1.2760, while it touched its strongest level since May 3 at $1.2655. Canadian Finance Minister Bill Morneau said the country's expensive housing market is a "very real issue" for Canadians and the government was "looking at all evidence" as it considers whether it needs to move again to tighten mortgage regulations. The value of Canadian building permits unexpectedly fell by 0.3 percent in April from March, its second consecutive monthly drop, data from Statistics Canada showed. In separate data, Canadian seasonally adjusted housing starts slowed to 188,570 in May from a revised 191,388 units in April, according to the Canada Mortgage and Housing Corporation. Canadian employment data for May will be released at the end of the week. The report will come after a massive wildfire last month cut production in Alberta's oil sands region. The Bank of Canada has said it expects damage from the wildfire to shave 1.25 percentage points off economic growth in the second quarter. Canadian government bond prices were slightly higher across the maturity curve, with the two-year price up 0.5 Canadian cent to yield 0.527 percent and the benchmark 10-year rising 8 Canadian cents to yield 1.212 percent. (Reporting by Fergal Smith; Editing by Paul Simao)
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