June 7, 2018 / 1:34 PM / 6 months ago

CANADA FX DEBT-C$ steadies as Ontario votes, BoC assesses financial stability

    * Canadian dollar at C$1.2949, or 77.23 U.S. cents
    * Price of U.S. oil rises more than 1 percent to $65.41 a
barrel  
  
    * Bond prices mixed across a steeper yield curve
    * 10-year yield touches a nearly two-week high at 2.340
percent

    TORONTO, June 7 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday as voters in
Ontario headed to the polls and ahead of an assessment by the
Bank of Canada of risks to the stability of the financial
system.
    The central bank, which has worried about the country's high
household debt, will release at 10:30 a.m. EDT (1430 GMT) its
June issue of the Financial System Review. A press conference
with Bank of Canada Governor Stephen Poloz and Senior Deputy
Governor Carolyn Wilkins will follow at 11:15 a.m. EDT (1515
GMT).
    Populist Doug Ford's Progressive Conservative party is
leading in opinion polls, in an election likely to end 15 years
of Liberal rule in Ontario, Canada's most populous
province.            
    At 9:21 a.m. EDT (1321 GMT), the Canadian dollar         
was nearly unchanged at C$1.2949 to the greenback, or 77.23 U.S.
cents. The currency traded in a narrow range of C$1.2935 to
C$1.2968.
    Canada's dollar will strengthen over the coming year as
economic growth prompts the Bank of Canada to raise interest
rates again, a Reuters poll showed, but strategists see risk to
their bullish forecasts from talks to revamp the North American
Free Trade Agreement.             
    U.S. President Donald Trump is not backing down from the
tough line he has taken on trade, the White House's top economic
adviser said on Wednesday, setting the stage for a showdown with
top allies at this week's G7 summit in Canada.                 
    The price of oil, one of Canada's major exports, rose on
Thursday on concerns about a plunge in exports from Venezuela,
although surging U.S. production kept gains in check.
            
    U.S. crude        prices were up more than 1 percent at
$65.41 a barrel.     
    The U.S. dollar        fell against a basket of major
currencies as bets that the European Central Bank will next week
signal a winding down of its vast bond-buying program by the end
of this year boosted the euro.                 
    Canadian government bond prices were mixed across a steeper
yield curve, with the two-year            up 1.5 Canadian cents
to yield 1.934 percent and the 10-year             falling 8
Canadian cents to yield 2.317 percent.
    The 10-year yield touched its highest intraday since May 25
at 2.340 percent.
    Canada's employment report for May is due on Friday.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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