CANADA FX DEBT-C$ holds firm despite dismal markets

* Canadian dollar at C$1.0013 vs US$, or 99.87 U.S. cents
    * Briefly touches three-month low
    * Global stocks fall for seventh day
    * Canadian manufacturing sales up on aerospace gains
    * Focus stays on U.S. "fiscal cliff," Europe debt crisis

    By Solarina Ho
    TORONTO, Nov 15 (Reuters) - The Canadian dollar strengthened
against the greenback on Thursday, finding some demand among
investors despite the prevailing gloom in markets over the
global economy.
    Global stocks fell for a seventh straight day on Thursday
after data showed the euro zone entered a recession in the third
quarter and on fears over the U.S. "fiscal cliff." 
    The currency also held firm as oil prices declined despite a
flare-up of violence in Gaza. 
    "Equity markets have been driving a lot of the Canadian
dollar selling," said Steve Butler, director of foreign exchange
trading at Scotiabank, adding the currency was trapped in a
    "Despite a rather dismal performance by the equity market,
the Canadian dollar is actually hanging in pretty well."
    Nervousness over Europe's debt crisis and over how the
United States will address its fiscal problems have kept
investors away from assets, such as the commodity-linked
Canadian dollar, considered to be riskier.
    The Canadian dollar finished the North American
session at C$1.0013 versus the U.S. dollar, or 99.87 U.S. cents.
This was firmer than Wednesday's close of C$1.0038, or 99.62
U.S. cents.
    The currency has been trading between C$0.9982 and C$1.0043
- a three-month low it hit briefly on Thursday - for the past
week. But it has not sustained weakness against the U.S. dollar
beyond the C$1.0040 level.
    "There still is some demand for Canada out there ... a lot
of corporates have interest to buy Canada," said Butler.
    The Canadian dollar's performance was mostly stronger
against other major currencies as well, but it was
underperforming against the euro, touching its weakest level in
about two weeks. 
    In economic news, Canadian manufacturing sales rose 0.4
percent in September from August, mainly on a sharp rise in
aerospace, but sales fell in the heavyweight auto industry and
in most other industries, according to Statistics Canada.
    "(There's) nothing too much on the data front to really
alter sentiment," said David Tulk, chief Canada macro strategist
at TD Securities.
    Prices for Canadian government debt were mostly lower, with
the two-year bond unchanged to yield 1.073 percent,
and the benchmark 10-year bond down 9 Canadian cents
to yield 1.711 percent.