CANADA FX DEBT-C$ weakens as oil falls, Wall Street retreats

* Canadian dollar at C$1.3128, or 76.17 U.S. cents
    * Bond prices higher across the maturity curve

    TORONTO, April 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as oil prices fell,
while losses on Wall Street also weighed on the risk-sensitive
commodity-linked currency.
    Oil fell as rising exports from Iraq underlined the global
oversupply situation, outweighing the effects of a surprise fall
in U.S. inventories the previous day. 
    U.S. crude was down 0.7 percent to $37.49 a barrel.
    Wall Street retreated as investors worried about weak global
growth and uncertainty surrounding the Federal Reserve's plans
to hike interest rates this year. 
    The Canadian dollar looks set to weaken slightly in the
coming months because of the prospect of U.S. Federal Reserve
interest rate hikes and less-robust domestic economic data, a
Reuters poll showed. 
    At 9:40 a.m. EDT (1340 GMT), the Canadian dollar 
traded at C$1.3128 to the greenback, or 76.17 U.S. cents, weaker
than Wednesday's close of C$1.3094, or 76.37 U.S. cents.
    The currency's strongest level of the session was C$1.3019,
while its weakest was C$1.3155.
    The value of Canadian building permits issued in February
jumped by 15.5 percent on strength in the energy-producing
province of Alberta, which has been hit by the oil price slump,
Statistics Canada said. 
    Canadian government bond prices were higher across the
maturity curve in sympathy with U.S. Treasuries as risk appetite
    The price of the two-year rose 3.5 Canadian cents
to yield 0.529 percent and the benchmark 10-year was
up 25 Canadian cents to yield 1.187 percent.        
    Canada's labor market report on Friday is expected to show
that 10,000 jobs were added in March, rebounding from a decline
in the previous month. 

 (Reporting by Fergal Smith; Editing by Jeffrey Benkoe)