CANADA FX DEBT-C$ holds steady vs broadly stronger greenback as oil rallies

    * Canadian dollar at C$1.2183, or 82.08 U.S. cents
    * Loonie climbs 0.6 percent against the euro
    * U.S. crude        prices settle 2.2 percent higher
    * Canada's 10-year yield touches its highest in nearly

    By Fergal Smith
    TORONTO, Sept 13 (Reuters) - The Canadian dollar held steady
on Wednesday against its broadly stronger U.S. counterpart, as
oil prices rose and after Canada's finance minister indicated he
could live with a more robust loonie.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
nearly unchanged at C$1.2183 to the greenback, or 82.08 U.S.
    The currency's strongest level of the session was C$1.2131,
while it touched its weakest level since Sept. 7 at C$1.2220.   
    "It is more a U.S. dollar strength story," said Scott
Lampard, head of global markets at HSBC Bank Canada.
    The U.S. dollar        rose against a basket of major
currencies after a report showed U.S. producer prices rebounded
in August.             
    Against the euro, the loonie gained 0.6 percent to C$1.4473.
    The price of oil, one of Canada's major exports, rose after
the International Energy Agency said the global oil surplus was
starting to shrink.             
    U.S. crude        prices settled 2.2 percent higher at
$49.30 a barrel.    
    Finance Minister Bill Morneau told Reuters in an interview
late on Tuesday that the recent rise of the currency reflected
the country's economic strengths.             
    The Canadian dollar has rallied more than 13 percent against
the U.S. greenback since early May and touched its strongest in
more than two years on Friday.
    Data on Wednesday showed that lending to Canadian small
businesses climbed to the highest level in 1-1/2 years in July,
pointing to a pickup in corporate spending that could help
underpin recent economic strength.             
    Canada's economy has expanded at a rapid pace this year,
prompting the Bank of Canada to raise interest rates in July and
last week after sitting on the sidelines for nearly seven years.
    Still, the Bank of Canada is likely done raising interest
rates this year, a Reuters poll of primary dealers showed on
    "There are really divergent views on the direction of
interest rates and bank policy from this moment in time and
that's creating a bit more of an interesting trading
environment," Lampard said.
    Canadian government bond prices were lower across the yield
curve, with the 10-year             falling 12 Canadian cents to
yield 2.058 percent. The yield reached its highest intraday
since November 2014 at 2.074 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli and
Sandra Maler)