CANADA FX DEBT-Loonie steadies as higher oil prices offset trade war fears

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar trades near flat against the greenback
    * Canadian housing starts jump to 235,460 units in April
    * Price of U.S. oil increases 1.2%
    * Canada's 10-year yield hits a five-week low intraday at

    By Fergal Smith
    TORONTO, May 8 (Reuters) - The Canadian dollar was barely
changed against the greenback on Wednesday, as higher oil prices
and domestic data showing a sharp rise in housing starts offset
fears of a worsening in the trade dispute between the United
States and China.
    At 3:34 p.m. EDT (1934 GMT), the Canadian dollar         
was trading nearly unchanged at 1.3471 to the greenback, or
74.23 U.S. cents. The currency, which has declined 3% since
February, traded in a narrow range of 1.3445 to 1.3486.
    "There are two counteracting forces," said Rahim Madhavji,
president at Knightsbridge Foreign Exchange.
    The move up in oil prices is offsetting the potential
falling apart of U.S.-China trade talks, Madhavji added.
    The United States will raise tariffs on $200 billion worth
of Chinese imports to 25 percent from 10 percent effective on
Friday, according to a notice posted to the Federal Register on
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy could suffer if the
global flow of capital or trade slows.
    The price of oil was boosted by a surprise drawdown in U.S.
crude stockpiles but an escalating U.S.-Chinese trade fight
limited oil's gains. U.S. crude oil futures        settled 1.2
percent higher at $62.12 a barrel.             
    Canadian housing starts surged nearly 23 percent from March
to 235,460 units as groundbreaking increased on multiple unit
and single detached urban homes, data from the national housing
agency showed.             
    The data could support the Bank of Canada's view that the
housing market will recover after slowing since the start of
    Canada's trade report for March is due on Thursday, while
the April jobs report is due on Friday.
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 4 Canadian cents to yield 1.600% and the 10-year
            declined 26 Canadian cents to yield 1.712%.
    Earlier in the day, the 10-year yield touched its lowest
since April 2 at 1.654%.  

 (Reporting by Fergal Smith
Editing by Marguerita Choy)