* Canadian dollar rises 0.3 percent against the greenback
* Price of U.S. oil falls nearly 1 percent
* Canada's industry capacity use fell to 82.6 percent in Q3
* Canadian bond prices trade lower across steeper yield curve
By Fergal Smith
TORONTO, Dec 12 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the greenback broadly declined, and as stocks got a boost from optimism over trade negotiations between the United States and China.
The U.S. dollar .DXY declined against a basket of major currencies as expectations that British Prime Minister Theresa May would survive a no-confidence vote on her leadership helped boost the pound. we are seeing is the Canadian dollar strengthening in an environment of broad-based U.S. dollar weakness," said Eric Theoret, a currency strategist at Scotiabank. "In an environment of risk appetite you typically do tend to see the U.S. dollar weaken as people get out of the (safe) havens and into riskier assets."
U.S. stocks jumped about 1.6 percent on Wednesday, bolstered by the technology sector, as signs Beijing would ease its "Made in China 2025" industrial policy added to optimism fueled by President Donald Trump's upbeat comments on trade talks. on Tuesday that a top executive of Chinese telecoms giant Huawei Technologies Co Ltd was granted bail by a Canadian court, 10 days after her arrest in Vancouver at the request of U.S. authorities, helped bolster market sentiment, Theoret said.
Canada exports many commodities, including oil, and runs a current account deficit, so its economy stands to benefit if the outlook improves for the global flow of trade and capital.
The price of oil turned lower after getting an earlier boost from an industry report that showed a drop in U.S. crude inventories. U.S. crude oil futures CLc1 settled nearly 1 percent down at $51.15 a barrel. 3:34 p.m. (2034 GMT), the Canadian dollar CAD=D4 was trading 0.3 percent higher at 1.3349 to the greenback, or 74.91 U.S. cents.
Last Thursday, the loonie touched its weakest level in nearly 18 months at 1.3445 to the U.S. dollar after Bank of Canada Governor Stephen Poloz said the economy was less strong than forecast. industry ran at 82.6 percent of capacity in the third quarter, below a downwardly revised 84.1 percent in the second quarter, Statistics Canada said on Wednesday. the Teranet-National Bank Composite House Price Index showed that Canadian home prices fell 0.3 percent in November from October, the second straight month of decline. government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR declined 29 Canadian cents to yield 2.115 percent.