CANADA FX DEBT-C$ pares recent losses even as oil prices fall
* Canadian dollar at C$1.3146, or 76.07 U.S. cents * Bond prices higher across a flatter yield curve * 10-year yield touches a three-week low at 1.643 percent TORONTO, Feb 8 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday, paring some recent losses even as oil prices fell, while domestic data showed a rise in housing starts. The seasonally adjusted annualized rate of housing starts rose to a higher-than-expected 207,408 units in January, data from the national housing agency showed, suggesting ground breaking on new homes was off to a strong start in 2017. On Tuesday, the loonie had hit a two-week low at C$1.3213 to the greenback, pressured by a drop in Canadian export volumes in December and lower oil prices. Oil, one of Canada's major exports, slid again on Wednesday as a big increase in U.S. crude inventories and a slump in Chinese demand implied that the global market remains oversupplied despite producers' efforts to cut output. At 9:26 a.m. ET (1426 GMT), the Canadian dollar was trading at C$1.3146, or 76.07 U.S. cents, stronger than Tuesday's close of C$1.3167, or 75.95 U.S. cents. The currency's strongest level of the session was C$1.3141, while its weakest was C$1.3200. Canada's employment report for January is due on Friday. The job market is expected to be unchanged after 2016's strong second half, leaving the unemployment rate steady at 6.9 percent. Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries as investors weighed prospects for U.S. stimulus measures and Federal Reserve interest rate hikes. The two-year price rose 3 Canadian cents to yield 0.725 percent, and the 10-year climbed 40 Canadian cents to yield 1.643 percent, its lowest since Jan. 17. Brazil opened a formal complaint against Canada at the World Trade Organization, accusing the country of distorting the global aerospace industry with subsidies for planemaker Bombardier Inc . (Reporting by Fergal Smith; Editing by Lisa Von Ahn)
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