CANADA FX DEBT-C$ extends losses as oil prices fall; Poloz maintains tone

(Adds details, closing market figures, strategist comments)
    * Canadian dollar at C$22.32, or 81.75 U.S. cents
    * Bond prices mostly lower across maturity curve

    By Solarina Ho
    TORONTO, May 19 (Reuters) - The Canadian dollar retreated
against its U.S. counterpart on Tuesday to its weakest level in
about a month, as the greenback rallied to a two-week high
against a basket of major currencies and helped push crude oil
prices down more than 3 percent.
    The Canadian dollar extended its losses from Monday, ahead
of a speech by Bank of Canada Governor Stephen Poloz that had
many market participants speculating that Poloz might temper his
previous optimism about an improving Canadian economy. But
Poloz's speech on Tuesday largely left the Bank of Canada's
views unchanged ahead of its monetary policy decision next week.
    "There was an expectation that perhaps he'd backpedal a
little bit on the optimism we got earlier. But we didn't really
get that," said Shaun Osborne, chief currency strategist at TD
Securities. "It sounded a bit cautious at the margins." 
    The Canadian dollar ended at C$1.2232 to the
greenback, or 81.75 U.S. cents, sharply weaker than Friday's
Bank of Canada close of C$1.2022, or 83.18 U.S. cents. The
loonie traded between C$1.2130 and C$1.2250 on Tuesday.
    Most Canadian trading floors were closed on Monday for the
Victoria Day holiday, when the Canadian dollar saw a substantial
retreat and ended at C$1.2159, or 82.24 U.S. cents, according to
Thomson Reuters Eikon data.
    "Given the rebound we've seen from C$1.19 last week, the
Canadian dollar didn't look entirely fundamentally justified
trading as high as it did," Osborne said.
    The U.S. dollar, already bolstered by indications the
European Central Bank may take more measures to lower euro zone
bond yields and boost inflation, was given additional support by
unexpectedly better U.S. housing data for April. 
    The greenback's strength, combined with a well supplied
global oil market, also pushed the price of crude, a key
Canadian export, down sharply, for a fifth straight day of
losses. U.S. crude prices fell 3.65 percent to $57.26 a
barrel, while Brent crude fell 3.14 percent to $64.18 a
    Despite the loonie's losses, it was stronger against almost
all its major currency counterparts.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 9.5 Canadian
cents to yield 0.696 percent and the benchmark 10-year
 sliding 1.04 Canadian cents to yield 1.852 percent.
    * The Canada-U.S. two-year bond spread was 7.9 basis points,
while the 10-year spread was -45.7 basis points.

 (Reporting by Solarina Ho; Editing by Paul Simao and Leslie