CANADA FX DEBT-C$ steadies as domestic data offsets Keystone XL setback

    * Canadian dollar at C$1.3144, or 76.08 U.S. cents
    * Bond prices higher across flatter yield curve

    TORONTO, Aug 16 (Reuters) - The Canadian dollar was nearly
unchanged against its U.S. counterpart on Thursday after a
planned oil pipeline from Alberta to Nebraska met with a
setback, offsetting domestic data that showed a rise in factory
    A federal judge in Montana on Wednesday ordered the U.S.
State Department to do a full environmental review of a revised
route for a phase of the Keystone XL crude oil pipeline, which,
when completed, would carry heavy crude to Steele City in
Nebraska from Canada's oilsands in Alberta.             
    The pipeline could help reduce transport bottlenecks for
Canadian oil, which trades at a discount to the price of U.S.
    Canadian factory sales grew by 1.1 percent in June from May,
thanks largely to a rebound in petroleum and coal products after
temporary shutdowns in the spring, Statistics Canada said.
    At 9:37 a.m. EDT (1337 GMT), the Canadian dollar         
was trading near flat at C$1.3144 to the greenback, or 76.08
U.S. cents.
    The currency, which lagged many other "G10" currencies on
Wednesday, traded in a range of C$1.3114 to C$1.3164. On Monday,
it neared a three-week low of C$1.3179. 
    Mexico's economy minister on Wednesday said that Mexico and
the United States may not meet an August goal to finish
bilateral talks to revamp the North American Free Trade
Agreement, which includes Canada and is threatened by
disagreements over automobile trade rules and other issues.
    The U.S. dollar weakened against a basket of other major
currencies as news that a Chinese delegation will travel to the
United States for trade talks prompted investors to buy back
into currencies hit hard in a selloff in recent days.
    U.S. crude oil futures        were up 0.1 percent at $65.09
a barrel. Oil is one of Canada's major exports. 
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 0.5 Canadian cent
to yield 2.087 percent and the 10-year             rising 15
Canadian cents to yield 2.252 percent.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)