* Canadian dollar at C$1.3462, or 74.28 U.S. cents
* Loonie touches its weakest since Dec. 30 at C$1.3470.
* Bond prices lower across a steeper yield curve
* 10-year yield touches a 3-week high at 1.800 percent
TORONTO, March 8 The Canadian dollar weakened on
Wednesday to a two-month low against its U.S. counterpart as oil
prices fell and the greenback gained ground against a basket of
Gains for the U.S. dollar came as data showed U.S.
private employers added 298,000 jobs in February, well above
Stronger-than-expected U.S. payroll numbers, due for release
on Friday, could help cement expectations that the Federal
Reserve will raise interest rates next week.
U.S. crude prices were down 1.45 percent at $52.37 a
barrel after an industry report pointed to a large rise in crude
inventories in the United States, renewing oversupply concerns
despite OPEC output curbs.
Oil is one of Canada's major exports.
At 9:22 a.m. ET (1422 GMT), the Canadian dollar was
trading at C$1.3462 to the greenback, or 74.28 U.S. cents,
weaker than Tuesday's close of C$1.3416, or 74.55 U.S. cents.
The currency's strongest level of the session was C$1.3398,
while it touched its weakest since Dec. 30 at C$1.3470.
In domestic data, the seasonally adjusted annualized rate of
housing starts rose to 210,207 units from an upwardly revised
208,934 in January, the Canadian Mortgage and Housing
Corporation (CMHC) said. Economists had expected starts to
decline to 200,000.
In addition, the value of building permits rose by 5.4
percent in January from December, and labor productivity rose
0.4 percent in the fourth quarter, data from Statistics Canada
Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
fell 5 Canadian cents to yield 0.827 percent, and the
10-year declined 50 Canadian cents to yield 1.798
The 10-year yield touched its highest intraday level since
Feb. 15 at 1.800 percent.
Canada will release its next federal budget on March 22, the
finance minister said on Tuesday, setting the stage for a fresh
estimate of how big the deficit will get as the Liberal
government spends on infrastructure to boost the economy.
Canada's employment report for February is due on Friday.
(Reporting by Fergal Smith Editing by W Simon)