CANADA FX DEBT-Canadian dollar weakens as U.S. stimulus talks drag on

       * Canadian dollar falls 0.1% against the greenback
    * Price of U.S. oil increases 0.1%
    * Canadian bond yields were little changed across the curve

    TORONTO, Oct 22 (Reuters) - The Canadian dollar edged lower
against its broadly stronger U.S. counterpart on Thursday as
investor optimism waned for a pre-election U.S. coronavirus
relief package, with the loonie extending its pullback from a
six-week high the day before.
    World shares slid to a two-week low as a surge in global
COVID-19 cases and fractious U.S. stimulus talks kept financial
markets cautious. Canada is a major producer of commodities,
including oil, so the loonie tends to be sensitive to the
outlook for the global economy.
    U.S. crude        prices were up 0.1% at $40.08 a barrel,
with the market struggling to fully recover from the previous
session's losses when higher U.S. gasoline inventories signaled
a deteriorating demand outlook as the number of coronavirus
cases soars.
    The U.S. dollar rebounded from seven-week lows against a
basket of major currencies, while the Canadian dollar        was
trading 0.1% lower at 1.3160 to the greenback, or 75.99 U.S.
cents. On Wednesday, the loonie touched its strongest intraday
level since Sept. 7 at 1.3077 but ended the day lower.
    Data on Wednesday showed that Canada's annual inflation rate
accelerated in September but softer-than-expected retail sales
growth for August and a sluggish estimate for September suggest
a dampening heading into the holidays.
    Also on Wednesday, Canadian Prime Minister Justin Trudeau
survived a confidence vote after a key opposition party backed
his ruling Liberals, averting the chance of a snap election as a
coronavirus outbreak worsens.
    Canadian government bond yields were little changed across
the curve on Thursday, with the 10-year             down less
than half a basis point at 0.615%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)

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