CANADA FX DEBT-C$ rises ahead of BoC interest rate decision as oil firms

    * Canadian dollar at C$1.2990, or 76.98 U.S. cents
    * U.S. oil prices rise 0.4 percent
    * Bond prices lower across the yield curve

    TORONTO, May 30 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday, boosted ahead of a
Bank of Canada interest rate decision by higher oil prices and
broader declines for the greenback.    
    The price of oil, one of Canada's major exports, was
supported by tight supplies despite expectations OPEC and its
allies will pump more in the second half of 2018 and helped by
forecasts U.S. inventories fell.             
    U.S. crude        prices were up 0.40 percent at $67.00 a
    The U.S. dollar        fell after reports that Italy's
biggest party would make a renewed attempt to form a coalition
government and end months of political turmoil helped the euro
recover some recent lost ground.             
    The Bank of Canada probably will hold interest rates steady
as indebted consumers and uncertain trade policy necessitate
caution, a Reuters poll predicted.             
    The central bank's interest rate announcement is due at 10
a.m. EDT (1400 GMT).
    At 9:08 a.m. EDT (1308 GMT), the Canadian dollar         
was trading 0.2 percent higher at C$1.2990 to the greenback, or
76.98 U.S. cents.
    The currency traded in a range of C$1.2950 to C$1.3040. On
Tuesday it touched its weakest in more than two months at
    Canada's current account deficit widened to C$19.50 billion
in the first quarter, the third largest ever, thanks to a
growing international trade gap in goods, Statistics Canada
    In separate data, Canadian producer prices rose by 0.5
percent in April from March, the fourth consecutive increase, on
higher prices for energy and petroleum products.
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 7 Canadian cents to yield 1.883 percent and the
10-year             declined 50 Canadian cents to yield 2.247
    On Tuesday, the 10-year yield touched its lowest since April
11 at 2.165 percent.

 (Reporting by Fergal Smith
Editing by Bill Trott)