Canadian dollar steadies as Ontario votes, BoC assesses financial stability

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Thursday as voters in Ontario headed to the polls and ahead of an assessment by the Bank of Canada of risks to the stability of the financial system.

The central bank, which has worried about the country's high household debt, will release at 10:30 a.m. EDT (1430 GMT) its June issue of the Financial System Review. A press conference with Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will follow at 11:15 a.m. EDT (1515 GMT).

Populist Doug Ford's Progressive Conservative party is leading in opinion polls, in an election likely to end 15 years of Liberal rule in Ontario, Canada's most populous province.

At 9:21 a.m. EDT (1321 GMT), the Canadian dollar was nearly unchanged at C$1.2949 to the greenback, or 77.23 U.S. cents. The currency traded in a narrow range of C$1.2935 to C$1.2968.

Canada's dollar will strengthen over the coming year as economic growth prompts the Bank of Canada to raise interest rates again, a Reuters poll showed, but strategists see risk to their bullish forecasts from talks to revamp the North American Free Trade Agreement.

U.S. President Donald Trump is not backing down from the tough line he has taken on trade, the White House's top economic adviser said on Wednesday, setting the stage for a showdown with top allies at this week's G7 summit in Canada.

The price of oil, one of Canada's major exports, rose on Thursday on concerns about a plunge in exports from Venezuela, although surging U.S. production kept gains in check.

U.S. crude prices were up more than 1 percent at $65.41 a barrel.

The U.S. dollar <.DXY> fell against a basket of major currencies as bets that the European Central Bank will next week signal a winding down of its vast bond-buying program by the end of this year boosted the euro.

Canadian government bond prices were mixed across a steeper yield curve, with the two-year up 1.5 Canadian cents to yield 1.934 percent and the 10-year falling 8 Canadian cents to yield 2.317 percent.

The 10-year yield touched its highest intraday since May 25 at 2.340 percent.

Canada's employment report for May is due on Friday.

(Reporting by Fergal Smith; Editing by Nick Zieminski)

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