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CANADA FX DEBT-Canadian dollar pares weekly decline as vaccine hopes rise

    * Canadian dollar gains 0.1% against the greenback
    * Canadian manufacturing sales fall by 2.0% in August
    * U.S. crude        prices were down 0.9% at $40.59 a barrel
    * Canada's 10-year yield was nearly unchanged at 0.571%

    TORONTO, Oct 16 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Friday, recouping some of this
week's decline, as investors cheered prospects for a COVID-19
vaccine and domestic data showed factory shipments falling in
line with expectations.            
    U.S. stock index futures rose after Pfizer said it could
apply for emergency use of its COVID-19 vaccine candidate as
early as November, while data showed stronger-than-expected
retail sales growth last month.             
    Canada is a major producer of commodities, including oil, so
the loonie tends to be sensitive to prospects for global
economic recovery.
    U.S. crude        prices were down 0.9% at $40.59 a barrel
on concern that a spike in COVID-19 cases in Europe and the
United States is curtailing demand in two of the world's biggest
fuel consuming regions.             
    Canadian manufacturing sales fell by 2.0% in August,
following three months of consecutive gains, Statistics Canada
said. Excluding transportation equipment, sales rose
1.1%.            
    The Canadian dollar        was trading 0.1% higher at 1.3206
to the greenback, or 75.72 U.S. cents, having traded in a range
of 1.3191 to 1.3237. For the week, the loonie was on track to
end 0.7% lower.    
    Preserving Canada's triple-A credit rating could be less of
a priority for Ottawa than in years gone by, with the focus on
digging the economy out of a hole rather than staying in a
shrinking group of top-rated sovereign borrowers, analysts say.
            
    Canadian government bond yields were mixed across the curve,
with the 10-year             nearly unchanged at 0.571%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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