* Canadian dollar at C$1.2433, or 80.43 U.S. cents
* Bond prices dip across much of the yield curve
By Fergal Smith
TORONTO, Jan 17 (Reuters) - The Canadian dollar steadied against its U.S. counterpart on Wednesday as the greenback broadly rose and investors prepared for a potential interest rate hike by the Bank if Canada.
The central bank will announce its interest rate decision and release its Monetary Policy Report at 10 a.m. ET (1500 GMT). Money markets expect a rate increase and at least two more by the end of the year. BOCWATCH
The Bank of Canada's benchmark interest rate sits at 1 percent.
"The BoC has no problem surprising markets but it has had enough good news to deliver 25 basis points," Elsa Lignos, global head of FX strategy at RBC Europe Limited, said in a research note.
Lignos pointed to "very strong job gains, a multi-decade low in unemployment and increasing signs of capacity pressures from the BOS (Business Outlook Survey)."
Still, worries that U.S. President Donald Trump could soon announce that the United States intends to pull out of the North American Free Trade Agreement could temper prospects for additional rate hikes this year. The sixth round of talks on renegotiating NAFTA is due to take place in Montreal on Jan. 23-28.
The U.S. dollar .DXY gained against a basket of major currencies as the euro pulled back from a three-year high above $1.23. 9:17 a.m. EST (1417 GMT), the Canadian dollar CAD=D4 was unchanged at C$1.2433 to the greenback, or 80.43 U.S. cents.
The currency traded in a range of C$1.2411 to C$1.2461. It touched its strongest in one week on Tuesday at C$1.2397.
The price of oil, one of Canada's major exports, edged lower after reaching a three-year high intraday on Tuesday. U.S. crude CLc1 prices were down 0.2 percent at $63.63 a barrel. government bond prices were slightly lower across much of the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR was down 2 Canadian cents to yield 1.784 percent and the 10-year CA10YT=RR declined 4 Canadian cents to yield 2.177 percent.