(Adds analyst comments and updates prices)
* Canadian dollar at C$1.3163, or 75.97 U.S. cents
* Bond prices slightly higher across the maturity curve
By Fergal Smith
TORONTO, Aug 8 (Reuters) - The commodity-linked Canadian dollar stabilized against its broadly firmer U.S. counterpart on Monday as pressure on the currency triggered by recent weak domestic data was offset by higher oil prices.
The Canadian dollar's more stable performance follows steep losses on Friday as a slump in domestic jobs and a record-wide trade deficit contrasted with a robust U.S. jobs report. Canadian economic data" has weighed on the loonie, said Eric Viloria, currency strategist at Wells Fargo (NYSE:WFC).
The value of Canadian building permits declined 5.5 percent in June from May, data from Statistics Canada showed on Monday. expects the Canadian dollar to weaken over time, driven by a widening interest rate differential between the two economies as the U.S. Federal Reserve resumes rate hikes and the Bank of Canada stays on hold.
The implied probability of a Bank of Canada rate cut has increased to 19 percent, overnight index swaps data showed, from just 12 percent before Friday's weak domestic jobs and trade data. BOCWATCH
The Canadian dollar CAD=D4 ended at C$1.3163 to the greenback, or 75.97 U.S. cents, slightly stronger than Friday's close of C$1.3164, or 75.96 U.S. cents.
The currency's strongest level of the session was C$1.3135, while its weakest was C$1.3197.
On Friday, the Canadian dollar touched a nine-day low at C$1.3200.
Speculators reduced bullish bets on the Canadian dollar for the first time in six weeks, Commodity Futures Trading Commission data showed on Friday. Net long Canadian dollar positions fell to 17,758 contracts in the week ended Aug. 2 from 23,180 contracts in the prior week. futures rose amid renewed speculation that OPEC would try to restrain member producers' output. U.S. crude CLc1 prices settled $1.22 higher, or 2.9 percent, at $43.02 a barrel. O/R
The U.S. dollar .DXY rose against a basket of major currencies after Friday's jobs data raised expectations that the Federal Reserve is closer to raising interest rates. government bond prices were slightly higher across the maturity curve, with the two-year CA2YT=RR price up 2 Canadian cents to yield 0.51 percent and the benchmark 10-year CA10YT=RR rising 4 Canadian cents to yield 1.067 percent.
The yield on Canada's 10-year bond widened 1.1 basis points further below the yield on its U.S. equivalent, leaving the spread at -52.1 basis points, its largest gap since June 3, as Canadian government bonds outperformed.