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CANADA FX DEBT-Canadian dollar holds near 3-1/2-year high as commodities climb

 (Adds details throughout, updates prices)
    * Loonie trades in a range of 1.2079 to 1.2125
    * Price of U.S. oil settles 0.6% higher
    * Canada sells $3.5 billion of a 5-year U.S. dollar global
bond 
    * Canadian 10-year yield touches a six-day high at 1.551%

    TORONTO, May 11 (Reuters) - The Canadian dollar steadied
against its U.S. counterpart on Tuesday, holding near its
strongest level in 3-1/2 years as higher commodity prices added
to investors' worries about the outlook for inflation.
    U.S. stocks fell as speculation that rising inflation
pressure could prompt interest rate hikes sooner rather than
later dragged on shares.             
    Canada is a major producer of commodities, including oil.
U.S. crude oil futures        settled 0.6% higher at $65.28,
bolstered by lingering fears of gasoline shortages due to an
outage at the largest U.S. fuel pipeline system after a
cyberattack.             
    The Canadian dollar        was trading nearly unchanged at
1.2092 to the greenback, or 82.70 U.S. cents, having traded in a
range of 1.2079 to 1.2125.
    On Monday, it touched its strongest level since September
2017 at 1.2074, helped by the Bank of Canada's shift last month
to a more hawkish stance. BoC Governor Tiff Macklem is due to
speak on Thursday on "the benefits of an inclusive economy."
    Canada has tapped an international bond market for the first
time since before the coronavirus crisis, selling $3.5 billion
of a 5-year U.S. dollar global bond in a move that could pad its
foreign exchange reserves, a term sheet showed.             
    Canadian government bond yields were higher across the
curve, tracking the move in U.S. Treasuries. The 10-year
            rose to its highest level since last Wednesday at
1.551% before dipping to 1.541%, up 2.3 basis points on the day.
    

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter
Cooney)
  
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