CANADA FX DEBT-Loonie trades near flat as Trudeau eyes more deficit spending

    * Canadian dollar trades in a range of 1.3225 to 1.3260
    * Loonie is on track to rise 0.4% in September
    * Price of U.S. oil decreases 1.5%
    * Canadian bond prices fall across a steeper yield curve

    TORONTO, Sept 30 (Reuters) - The Canadian dollar kept pace
with its broadly stronger U.S. counterpart on Monday as the
party of Canadian Prime Minister Justin Trudeau promised
billions of dollars of new spending in a campaign platform ahead
of next month's federal vote.
    At 9:31 a.m. (1331 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3252 to the greenback, or 75.46
U.S. cents. The currency, which was on track to rise 0.4% for
the month, traded in a range of 1.3225 to 1.3260.
    Trudeau's Liberal Party, which is in a tough battle for
re-election, said on Sunday that new spending commitments would
require annual deficits of more than C$20 billion over the next
four years.             
    Deficits add to a country's debt load but could also boost
economic growth.
    The U.S. dollar        climbed against a basket of major
currencies after a report by Reuters that Germany's leading
economic institutes had revised down their growth forecast for
Europe's biggest economy for this year, weighed on the euro
    The price of oil, one of Canada's biggest exports, slipped
as China's economic outlook remained weak even as manufacturing
data improved, with the continuing trade war with the United
States weighing on demand growth for the world's largest crude
importer. U.S. crude oil futures        were down 1.5% at $55.10
a barrel.             
    Speculators have slashed their bullish bets on the Canadian
dollar to the lowest since June, data from the U.S. Commodity
Futures Trading Commission and Reuters calculations showed on
Friday. As of Sept. 24, net long positions had fallen to 4,592
contracts from 19,823 in the prior week.             
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 1.5 Canadian cents to yield 1.583% and the
10-year             declined 28 Canadian cents to yield 1.388%.
    The gap between Canada's 10-year yield and its U.S.
equivalent was unchanged at a spread of 31.5 basis points in
favor of the U.S. bond.
    Producer prices in Canada rose by 0.2% in August from July
on higher prices for pork products, as well as precious metals,
Statistics Canada said.                      
    Canada's gross domestic product data for July is due on
Tuesday, which could help guide expectations for the Bank of
Canada policy outlook.

 (Reporting by Fergal Smith
Editing by Alistair Bell)