* Canadian dollar falls 0.2% against the greenback * Canadian housing starts surge in June * Price of U.S. oil decreases 0.3% * Canada's 10-year yield touches a 5-week high at 1.594% TORONTO, July 9 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as the greenback broadly climbed and as investors, who have recently turned bullish on the loonie, awaited an interest rate decision on Wednesday by the Bank of Canada. The Bank of Canada is widely expected to leave its benchmark interest rate on hold at 1.75%, despite expected policy-easing as soon as this month by the U.S. Federal Reserve. The central bank has said that there was evidence that a slowdown in the domestic economy was temporary. The U.S. dollar gained against a basket of major currencies as investors re-assessed their expectations of how much the Fed may cut interest rates this month. Fed Chief Jerome Powell is due to testify before Congress on Wednesday. The price of oil, one of Canada's major exports, was pressured by worries about the U.S.-China trade dispute that has been dragging down the global economy and oil demand. U.S. crude oil futures fell 0.3% to $57.5 a barrel. At 9:42 a.m. (1342 GMT), the Canadian dollar was trading 0.2% lower at 1.3127 to the greenback, or 76.18 U.S. cents. It was the third straight session that the currency has declined, after it notched last Thursday an eight-month high at 1.3038. The loonie traded on Tuesday in a range of 1.3093 to 1.3135. Speculators have turned bullish on the Canadian dollar for the first time since March 2018, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Monday. As of July 2, there were 6,293 contracts net long the loonie, which is a swing from 14,790 contracts net short the currency in the prior week. Canadian housing starts rose much more than expected in June, to a seasonally adjusted annualized rate of 245,657 units, the Canadian Mortgage and Housing Corporation (CMHC) said. Separate data from Statistics Canada showed that the value of building permits fell by 13% in May from April, largely due to the value of permits in British Columbia returning to recent levels following a surge in April. Canadian government bond prices were higher across the yield curve, with the two-year up 2 Canadian cents to yield 1.662% and the 10-year rising 2 Canadian cents to yield 1.578%. The 10-year yield touched its highest intraday since May 30 at 1.594%. (Reporting by Fergal Smith; Editing by Bernadette Baum)
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