CANADA FX DEBT-C$ weakens as oil falls, current account deficit widens

    * Canadian dollar at C$1.3490, or 74.13 U.S. cents
    * Bond prices mixed across steeper yield curve

    TORONTO, May 30 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Tuesday as oil prices fell and
the country's current account deficit widened, while U.S. data
helped boost the greenback.
    Prices of oil, one of Canada's major exports, were pressured
by concerns that production cuts by the world's big exporters
may not be enough to drain a global glut that has depressed the
market for almost three years.      
    U.S. crude        prices were down 0.94 percent at $49.33 a
    Canada's current account deficit widened more than expected
in the first quarter of the year on an increase in imports of
both good and services, data from Statistics Canada showed. The
C$14.05 billion gap exceeded economists' expectations for a
deficit of C$12 billion.              
    The U.S. dollar        nudged higher against a basket of
major currencies as U.S. consumer spending recorded its biggest
increase in four months in April and monthly inflation
rebounded. The data pointed to firming domestic demand early in
the second quarter that could allow the Federal Reserve to raise
interest rates next month.             
    At 9:04 a.m. ET (1304 GMT), the Canadian dollar          was
trading at C$1.3490 to the greenback, or 74.13 U.S. cents, down
0.2 percent.
    The currency traded in a range of C$1.3450 to C$1.3493.
    On Thursday, the currency touched its strongest level in
five weeks at C$1.3388 after the Bank of Canada struck a more
upbeat tone than investors had expected the day before.
    Canada is to release data on the country's gross domestic
product on Wednesday, while the country's trade data for April
is due on Friday.
    Economists forecast that the Canadian economy grew at a 3.9
percent annualized pace in the first quarter after a strong
expansion in the second half of 2016.         
    Canadian government bond prices were mixed across a steeper
yield curve. The two-year            was flat to yield 0.708
percent, and the 10-year             declined 9 Canadian cents
to yield 1.42 percent.
    On Monday, the 10-year yield had hit its lowest intraday
level in six months at 1.399 percent.

 (Reporting by Fergal Smith; Editing by W Simon)