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CANADA FX DEBT-Loonie sticks to narrow range as trade war fears linger

* Canadian dollar trades near flat against the greenback

* Price of U.S. oil rises 1.1%

* Canadian home prices fail to rise for eighth straight month

* Canadian bond prices dip across a steeper yield curve

TORONTO, May 14 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday as higher oil prices offset investor worries about an escalating trade war between the United States and China.

Global stocks steadied near a seven-week low as

U.S. President Donald Trump defended his trade war with China, promising a deal with Chinese President Xi Jinping soon, even as fears escalated about a protracted battle. Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt by a slowdown in the global flow of capital or trade. Oil prices rose sharply after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni armed movement aligned with Iran had attacked facilities belonging to state oil

company Aramco. U.S. crude oil futures were up 1.1% at

$61.73 a barrel.

At 9:20 a.m. (1320 GMT), the Canadian dollar was

trading nearly unchanged at 1.3480 to the greenback, or 74.18 U.S. cents. The currency, which has advanced 1.3% since the start of the year, traded in a narrow range of 1.3457 to 1.3488. Canadian Prime Minister Justin Trudeau's strategy to prioritize spending on the middle class at the beginning of his four-year term will not keep growth humming ahead of a general election in October, some economists said. Domestic data showed that home prices failed to rise for the eighth consecutive month. The Teranet-National Bank Composite House Price Index was unchanged last month from March.

Canada's inflation report for April is due on Wednesday. Canadian government bond prices were lower across a steeper

yield curve, with the two-year down 1.5 Canadiancents to yield 1.591% and the 10-year falling 9

Canadian cents to yield 1.674%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)