* Canadian dollar at C$1.2982, or 77.03 U.S. cents
* Price of U.S. oil rises 1.9 percent
* Bond prices higher across the yield curve
* 10-year yield touches near 2-week high intraday at 2.340 percent
By Fergal Smith
TORONTO, June 7 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as voters in Ontario headed to the polls and after the Bank of Canada fretted about a more uncertain trade outlook.
Trade uncertainty feels more risky than it did in April, the head of the Bank of Canada said, noting the impact of U.S. tariffs on aluminum and steel imports will be incorporated into updated economic forecasts next month. voters were voting on Thursday in an election all but certain to end 15 years of Liberal rule in Canada's most populous province, with Doug Ford's Progressive Conservative Party leading in opinion polls. 4 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading 0.3 percent lower at C$1.2982 to the greenback, or 77.03 U.S. cents. Still, the C$1.2935 to C$1.3002 range for the currency kept it within its recent holding pattern.
Leaders of the Group of Seven rich nations were headed to Canada for a summit more divided than at any time in the group's 42-year history, as U.S. President Donald Trump's "America First" policies risk causing a global trade war and deep diplomatic schisms. are sitting on their hands and waiting to see if anything comes out of the G7," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
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. price of oil, one of Canada's major exports, was lifted by concern about a steep drop in exports from Venezuela and worries OPEC may not raise production at its meeting this month. crude oil futures CLc1 settled 1.9 percent higher at $65.95 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. government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 6 Canadian cents to yield 1.909 percent and the 10-year CA10YT=RR climbed 21 Canadian cents to yield 2.284 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.