(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.1% against the greenback * Canada's current account deficit widens in first quarter * Price of U.S. oil slumps 3.8% * Canadian bond prices rise across a flatter yield curve By Fergal Smith TORONTO, May 30 (Reuters) - The Canadian dollar rose against the greenback on Thursday, recovering from a near five-month low a day earlier, as the Bank of Canada's forecast for the economy to pick up helped soften the blow for the currency from a drop in oil prices. Oil prices fell to their lowest in two months on a smaller-than-expected decline in U.S. crude inventories and fears of a global economic slowdown due to the U.S.-China trade war. U.S. crude oil futures settled 3.8% lower at $56.59 a barrel. "It's impressive, the ability of the Canadian dollar to hang tough with oil down so much," said Adam Button, chief currency analyst at ForexLive. The loonie has not weakened because of the market's perception that the U.S. Federal Reserve will cut interest rates before the Bank of Canada, Button said. Bank of Canada Senior Deputy Governor Carolyn Wilkins repeated the central bank's message from the day before that there was increasing evidence that the economic slowdown was temporary but that the bank was worried about trade frictions. Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt by a slowdown in the global flow of trade. Canada's current account deficit widened to C$17.35 billion in the first quarter from a revised C$16.62 billion deficit in the fourth quarter, on a higher deficit on trade goods and services, Statistics Canada said. At 3:52 p.m. (1952 GMT), the Canadian dollar was trading 0.1% higher at 1.3505 to the greenback, or 74.05 U.S. cents. The currency, which hit on Wednesday its weakest since Jan. 3 at 1.3547, traded in a range of 1.3485 to 1.3521. U.S. Vice President Mike Pence said he was pushing to get the U.S. Congress to ratify the new North American trade agreement this summer after both Canada and Mexico signaled they are ready to start the approval process. Canadian government bond prices rose across a flatter yield curve in sympathy with U.S. Treasuries. The two-year rose 1 Canadian cent to yield 1.526% and the 10-year climbed 22 Canadian cents to yield 1.556%. The gap between the 2- and 10-year yields narrowed by 1.8 basis points to a spread of 3 basis points in favor of the longer-dated bond, its smallest gap since August 2007. (Reporting by Fergal Smith; editing by Grant McCool)
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