CANADA FX DEBT-C$ slumps to 7-week low as oil falls, greenback climbs

    * Canadian dollar at C$1.2975, or 77.07 U.S. cents
    * Loonie hit its weakest since March 21 at C$1.2985
    * Price of oil falls 0.9 percent     
    * Bond prices lower across the yield curve

    TORONTO, May 8 (Reuters) - The Canadian dollar weakened to a
nearly seven-week low against its U.S. counterpart on Tuesday,
with the currency breaking out of its recent holding pattern as
oil prices fell and the greenback broadly gained.
    The price of oil, one of Canada's major exports, retreated
from its highest in 3-1/2 years ahead of an announcement by U.S.
President Donald Trump due later in the day on whether the
United States will reimpose sanctions on Iran.             
    U.S. crude        prices were down 0.92 percent at $70.08 a
    The U.S. dollar        surged to a 2018 high against other
major currencies as a rout of the euro prompted traders to buy
the greenback despite some concerns its rally may have been too
    At 9:09 a.m. EDT (1309 GMT), the Canadian dollar          
traded 0.7 percent lower at C$1.2975 to the greenback, or 77.07
U.S. cents. The currency hit its weakest since March 21 at
    Losses for the loonie came as investors weighed prospects
for the North American Free Trade Agreement.
    Senior Canadian, U.S. and Mexican officials met on Monday to
try to rescue slow-moving talks to update the NAFTA trade pact
in a new bid to resolve key issues before regional elections
complicate the process.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries.
    The two-year            dipped 3 Canadian cents to yield
1.931 percent and the 10-year             declined 15 Canadian
cents to yield 2.344 percent.    
    Canadian housing starts declined in April to a seasonally
adjusted annual rate of 214,379 units as builders responded to
slowing sales in Toronto, Canada's largest city, data from the
Canada Mortgage and Housing Corp showed on Tuesday.             
    Canada's jobs report for April is due on Friday.

 (Reporting by Fergal Smith
Editing by Jeffrey Benkoe)