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CANADA FX DEBT-Canadian dollar rebounds from 3-week low as housing starts surge

    * Canadian dollar rises 0.2% against the greenback
    * Loonie touches its lowest level since Aug. 17 at 1.3259
    * Price of U.S. oil increases 1.8%
    * Canadian bond yields trade mixed across a steeper curve

    TORONTO, Sept 9 (Reuters) - The Canadian dollar rose against
the greenback on Wednesday as oil prices rebounded and domestic
data showed a surprise jump in housing starts, with the loonie
recovering from an earlier three-week low ahead of a Bank of
Canada interest rate decision.
    The price of oil, one of Canada's major exports, clawed back
some of the losses it sustained in the previous session, but a
rebound in COVID-19 cases in some countries undermined hopes for
a steady recovery in global demand.             
    U.S. crude        prices were up 1.8% at $37.43 a barrel,
while global equity markets shrugged off heavy losses for U.S.
tech stocks and a major drugmaker delaying testing of a
coronavirus vaccine.             
    Canadian housing starts rose 6.9% in August compared with
the previous month to a seasonally adjusted annualized rate of
262,396 units. Economists had expected starts to fall to
220,000.             
    The Canadian dollar        was trading 0.2% higher at 1.3200
to the greenback, or 75.76 U.S. cents. The currency hit its
weakest intraday level since Aug. 17 at 1.3259.
    The Bank of Canada is expected to leave its benchmark
interest rate on hold at 0.25% on Wednesday and at least until
the end of 2022, a Reuters poll showed, despite data suggesting
to some analysts that the economy is recovering faster than the
central bank expected. The central bank's rate decision is due
at 10 a.m. (1400 GMT). 
    Canadian province British Columbia on Tuesday ordered the
closure of all nightclubs, and Ontario delayed an easing of
remaining restrictions imposed to fight the coronavirus
pandemic, as Canada reported a spike in new COVID-19 cases.
            
    Canadian government bond yields were mixed across a steeper
curve on Wednesday, with the 10-year             nearly
unchanged at 0.567%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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