* Loonie touches its weakest since December 4 at 1.3969

* Trade surplus widens to C$2.72 billion

* Price of oil settles 3.4% lower

* Canadian bond yields ease across the curve

By Fergal Smith

TORONTO, June 9 (Reuters) - The Canadian dollar steadied

near its lowest level this year against the U.S. dollar after

data showed that Canada's trade surplus widened in April

and ahead of a Bank of Canada interest rate decision.

The loonie was trading nearly unchanged at 1.3950 per

U.S. dollar, or 71.68 U.S. cents, after touching its weakest

intraday level since December 4 at 1.3969.

Canada's goods trade surplus rose to a 15-month high of C$2.72

billion ($1.95 billion) in April, in part because the Iran war

has pushed up the price of crude. Total exports increased 1.6%

to reach a record high of C$75.16 billion.

"Recent trade data suggest that Canadian exports have

largely recovered back to pre-2025 levels, albeit still with

some weakness in sectors hit hardest by U.S. tariffs," Andrew

Grantham, a senior economist at CIBC Capital Markets, said in a

note.

"However, with tariff uncertainty remaining as CUSMA

renegotiations drag on, further upward momentum will likely be

limited in the near-term."

The United States-Mexico-Canada Agreement - known as CUSMA

in Canada - has shielded much of the nation's exports from U.S.

tariffs. It's set for review by a July 1 deadline.

Investors expect the Bank of Canada to leave its benchmark

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

decision on Wednesday, as the central bank takes stock of slower

economic growth and the threat to the inflation outlook of

higher energy prices.

The price of oil settled 3.4% lower at $88.20 a barrel after

Iran and Israel said they had halted attacks on each other.

Canadian bond yields eased across the curve, tracking moves

in U.S. Treasuries. The 10-year was down 3.4 basis

points at 3.496%.