CANADA FX DEBT-C$ lags G10 peers as Poloz weighs pace of rate hikes

    * Canadian dollar trades near flat against the greenback
    * Price of U.S. oil falls 2.2 percent
    * Canadian factory sales fall 0.1 percent in October 
    * Canadian bond prices rise across the yield curve
    * 10-year yield hits a nearly one-year low at 2.021 percent

    TORONTO, Dec 18 (Reuters) - The Canadian dollar steadied
against its U.S. counterpart on Tuesday, underperforming other
G10 currencies as oil prices fell and Bank of Canada Governor
Stephen Poloz left the door open to a slower pace of interest
rate hikes.
    Poloz, speaking to CTV in an interview on Monday, said the
pace of interest rate hikes in Canada could be interrupted or
sped up depending on economic circumstances.             
    Earlier this month, expectations for additional tightening
by the Bank of Canada tumbled after Poloz said the central bank
would need to assess the impact on the economy of lower oil
    The price of oil, one of Canada's major exports, fell to its
lowest since September of last year after reports of swelling
inventories and forecasts of record U.S. and Russian output
combined with a sharp sell-off in stock markets as the outlook
for global growth deteriorated.             
    U.S. crude        prices were down 2.2 percent at $48.78 a
    Canada will offer C$1.6 billion in aid on Tuesday for the
struggling energy sector in the western province of Alberta, CTV
reported on Monday.              
    Canadian factory sales edged down by 0.1 percent in October
from September on lower wood product and primary metal
manufacturing sales, Statistics Canada said. Analysts had
forecast on average a decrease of 0.2 percent.
    At 8:37 a.m. EST (1337 GMT), the Canadian dollar         
was trading nearly unchanged at 1.3412 to the greenback, or
74.56 U.S. cents. The loonie, which traded in a range of 1.3392
to 1.3420, was the only G10 currency not to gain ground against
the U.S. dollar       .     
    The greenback declined against a basket of major currencies
as the recent rout on Wall Street bolstered the view that the
Federal Reserve's widely-expected interest rate hike on
Wednesday could mark the end of three years of steady rate
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The 10-year            
rose 7 Canadian cents to yield 2.034 percent.
    The 10-year yield touched its lowest intraday since Dec. 29
at 2.021 percent.
    Canada's inflation report for November is due on Wednesday.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)