CORRECTED-CANADA FX DEBT-Canadian dollar steadies near three-month high after inflation data

By Fergal Smith

TORONTO, Dec 15 (Reuters) - The Canadian dollar steadied on Monday against its U.S. counterpart as oil prices fell and domestic data showed inflation running at a cooler than expected pace.

The loonie CAD= was trading nearly unchanged at 1.3775 per U.S. dollar, or 72.60 U.S. cents, after earlier touching its strongest intraday level since September 17 at 1.3746.

Canada's annual inflation rate was 2.2% in November, unchanged from the previous month and below expectations for a 2.3% rate. CPI-median and CPI-trim, the Bank of Canada's preferred measures of core inflation, both eased to 2.8% from 3%.

"November's inflation report underscored why the Bank of Canada has not seemed overly worried about inflation trends in recent months," Leslie Preston, a senior economist at TD Economics said in a note. "Underlying inflation is still above the 2% target, but it is getting a lot closer in recent months."

Investors were pricing in about 23 basis points of tightening from the Bank of Canada next year, down from 35 basis points before the central bank's interest rate decision last Wednesday. The BoC left its benchmark rate on hold at a three-year low of 2.25% and signaled a possible end to its easing campaign.

The price of oil, one of Canada's major exports, settled 1.1% lower at $56.82 a barrel as investors balanced disruptions linked to escalating U.S.-Venezuelan tensions with oversupply concerns and the impact of a potential Russia-Ukraine peace deal.

Canadian bond yields moved lower across the curve. The 10-year CA10YT=RR was down 3 basis points at 3.413%, after earlier touching its lowest level since December 5 at 3.394%.