CANADA FX DEBT-Canadian dollar holds near 2-week low as bond yields climb

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Loonie touches its weakest since Oct. 6 at 1.3740

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Price of U.S. oil settles 1.2% higher

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Canadian producer prices rise by 0.4% in September

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Canadian bond yields ease/rise/trade mixed across the curve

By Fergal Smith

TORONTO, Oct 19 (Reuters) - The Canadian dollar was little changed against the greenback on Thursday, holding near its weakest level in 13 days, as long-term borrowing costs rose after U.S. Federal Reserve Chair Jerome Powell left the door open to additional interest rate hikes.

The Canadian dollar was trading nearly unchanged at 1.3719 to the greenback, or 72.89 U.S. cents, after earlier touching its weakest intraday level since Oct. 6 at 1.3740.

"When you look at the broader sweep of factors that generally affect the Canadian dollar - yields and yield differentials, risk appetite and commodities - nothing is working in the CAD's favor at the moment," said Shaun Osborne, chief currency strategist at Scotiabank.

"I think generally we'd need to see stronger risk appetite, a much weaker (U.S.) dollar overall, probably some relaxation in this rise in market rates in the U.S. before the CAD can improve."

The U.S. 10-year yield approached the 5% threshold for the first time in 16 years as Powell said the U.S. economy's strength and continued tight labor markets could warrant further interest rate increases.

A higher price for oil, one of Canada's major exports, was of little help for the loonie. U.S. crude oil futures settled up 1.2% at $89.37 a barrel as traders remained nervous that Israel's military campaign in Gaza could escalate to a regional conflict.

Producer prices in Canada grew by 0.4% in September from August on higher prices for energy and petroleum products, as well as motorized and recreational vehicles, Statistics Canada. Some of the price movements were attributable to the depreciating Canadian dollar.

Canadian bond yields were mixed across a steeper curve, tracking moves in U.S. Treasuries. The 10-year was up 8.8 basis points at 4.195%, moving back in reach of a 16-year high it posted earlier this month at 4.292%. (Reporting by Fergal Smith; Editing by Aurora Ellis)