CANADA FX DEBT-C$ weakens as oil prices slide to 3-month low

    * Canadian dollar at C$1.3487, or 74.15 U.S. cents
    * Bond prices slightly higher across the yield curve

    TORONTO, March 14 (Reuters) - The Canadian dollar weakened
on Tuesday against its U.S. counterpart as prices of oil, one of
Canada's major exports, fell and the greenback climbed broadly
ahead of an expected interest rate rise by the U.S. Federal
    With inflation showing signs of perking up, Fed policymakers
may signal on Wednesday there could be more than the three rate
rises they have forecast for this year.             
    Gains for the U.S. dollar        against a basket of
currencies came as European currencies were weighed down by
perceived political risks from Dutch and French elections and
Britain's planned exit from the EU.             
    U.S. crude        prices fell to a three-month low, down
1.53 percent at $47.66 a barrel, pressured by rising oil stock
    At 9:23 a.m. ET (1323 GMT), the Canadian dollar          was
trading at C$1.3487 to the greenback, or 74.15 U.S. cents,
weaker than Monday's close of C$1.3444, or 74.38 U.S. cents.
    The currency's strongest level of the session was C$1.3440,
while its weakest was C$1.3494.
    Last week the loonie hit a two-month low at C$1.3535 as oil
dropped below $50 a barrel and as the yield advantage for the
U.S. dollar grew.
    Canadian government bond prices were slightly higher across
the yield curve, with the two-year            up 3 Canadian
cents to yield 0.86 percent and the 10-year             rising
17 Canadian cents to yield 1.856 percent.
    The two-year yield fell 2.1 basis points further below its
U.S. equivalent to a spread of -51.8 basis points. Earlier in
March it had touched its widest gap since January 2016 at -55.2

 (Reporting by Fergal Smith Editing by W Simon)