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Loonie trades in a range of 1.3786 to 1.3810

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Heads for a 0.3% weekly decline

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Price of U.S. oil decreases 1.6%

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Bond yields ease across the curve

By Fergal Smith

TORONTO, Oct 18 (Reuters) - The Canadian dollar steadied

against its U.S. counterpart on Friday but was on track for its

third straight weekly decline, as oil prices fell and investors

bet on an unusually large interest rate cut from the Bank of

Canada.

The loonie was trading nearly unchanged at 1.38 to

the U.S. dollar, or 72.46 U.S. cents, after moving in a range of

1.3786 to 1.3810. For the week, the currency was down 0.3%.

"The fact that USD-CAD ends the week flirting with a break

above 1.38 should not be a surprise," said Nick Rees, senior FX

market analyst at Monex Europe Ltd.

"While appearing hot on the surface, the recent September's

jobs data was much weaker in the details, while a counterpart

CPI print seen this week was unambiguously soft."

Growth in Canada's consumer price index slowed more than

expected to 1.6% in September, which is below the Bank of

Canada's 2% target.

"Set against a backdrop of anemic growth, the data makes a

strong case for the BoC to deliver a 50 bp (basis point) rate

cut next week. We think they will too, suggesting that risks are

skewed toward further loonie downside," Rees said.

Investors see a roughly 90% chance the BoC will cut its

benchmark interest rate by half a percentage point at a policy

decision on Wednesday, swaps market data showed. The policy rate

is currently at 4.25%.

It would be the fourth rate cut since June and the first

reduction greater than 25 basis points in 15 years outside of

the pandemic era.

The price of oil, one of Canada's major exports, fell

1.4% to $69.70 a barrel as China's economic growth slowed and

threats to supply abated in the Middle East.

Canadian bond yields eased across the curve, with the

10-year down 3 basis points at 3.13%.