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CANADA FX DEBT-Canadian dollar hits six-day low as pandemic clips risk appetite

    * Canadian dollar weakens 0.5% against the greenback
    * U.S. oil price falls 2.7%
    * Canadian bond yields ease across a flatter curve

    TORONTO, Oct 26 (Reuters) - The Canadian dollar fell to a
six-day low against the greenback on Monday as rising COVID-19
infections and uncertain prospects for U.S. fiscal aid weighed
on sentiment, with investors also eyeing a Bank of Canada
interest rate decision this week.
    Global shares          started the week on the back foot as
surging coronavirus cases in Europe and the United States
clouded the global economic outlook, while there was no clear
prospect of a U.S. pandemic relief package.             
    Canada is a major producer of commodities, including oil, so
the loonie tends to be sensitive to global economic prospects.
    U.S. crude        prices were down 2.7% at $38.79 a barrel,
extending last week's decline, while the safe-haven U.S. dollar
rose against a basket of major currencies.
                        
    The Canadian dollar        was trading 0.5% lower at 1.3185
to the greenback, or 75.84 U.S. cents, giving back almost all of
last week's advance. The currency touched its weakest intraday
level since last Tuesday at 1.3196.
    Speculators have raised their bearish bets on the Canadian
dollar to their highest in seven weeks, data from the U.S.
Commodity Futures Trading Commission showed on Friday. As of
Oct. 20, net short positions had increased to 19,075 contracts
from 13,564 the previous week.
    The Bank of Canada is due to make an interest rate decision
and update its economic outlook on Wednesday. The central bank
has said it will leave rates at a record low of 0.25% until its
2% inflation target is achieved sustainably, which it does not
expect for at least two years.
    Canadian government bond yields were lower across a flatter
curve in sympathy with U.S. Treasuries. The 10-year yield
            fell 1.8 basis points to 0.625%, extending its
pullback from Friday's eight-week high of 0.680%.

 (Reporting by Fergal Smith
Editing by David Goodman
)
  
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