* Loonie touches its weakest level since April 7 at

1.3925

* Price of oil declines 3.8%

* Bond yields ease across the curve

By Fergal Smith

TORONTO, June 4 (Reuters) - The Canadian dollar steadied

near an earlier eight-week low against its U.S. counterpart on

Thursday as the price of oil fell and ahead of domestic jobs

data that could help guide expectations for an upcoming Bank of

Canada interest rate decision.

The loonie was trading nearly unchanged at 1.3895 per

U.S. dollar, or 71.97 U.S. cents, after touching its weakest

intraday level since April 7 at 1.3925.

"Weak domestic fundamentals and lingering trade uncertainty

mean that the CAD is not master of its own destiny at the

moment," Shaun Osborne and Eric Theoret, strategists at

Scotiabank, said in a note. "External developments will remain a

strong influence on price action."

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

trading 3.8% lower at $92.41 a barrel on investor hopes for an

end to the U.S.-Israeli war with Iran that could lead to a

reopening of the Strait of Hormuz, while the U.S. dollar

gave back some recent gains against a basket of major

currencies.

Canada's dollar will strengthen over the coming year so long as

the domestic economy recovers and progress is made in the review

of a continental trade pact, a Reuters poll showed.

Domestic employment data, due on Friday, is expected to show

the economy adding 10,000 jobs last month and the unemployment

rate holding steady at 6.9%, its highest level since October.

Investors expect the Bank of Canada to leave its benchmark

interest rate on hold at 2.25% for a fifth straight policy

decision next Wednesday, swap market data showed.

Canadian bond yields moved lower across the curve, tracking

moves in U.S. Treasuries. The 10-year was down 1.5

basis points at 3.420%.