CANADA FX DEBT-C$ slips after Keystone bill fails to pass

(Adds new comment, Fed details, closing figures)
    * Canadian dollar at C$1.1351, or 88.10 U.S. cents
    * Bond prices fall across the maturity curve

    By Solarina Ho
    TORONTO, Nov 19 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday after the U.S. Senate
narrowly failed to pass a bill late on Tuesday that would have
approved construction of the controversial Keystone XL pipeline.
    The currency briefly pared losses on a weaker U.S. dollar
after the Federal Reserve's October meeting minutes showed
policymakers had wrestled with whether addressing the global
economic slowdown and market volatility would overstate its
    The overall statement did not change market expectations for
when the Fed may hike interest rates next year, however, and the
Canadian dollar settled back to earlier session levels.
    "A snooze would be a good way to describe it," said Amo
Sahota, director at Klarity FX in San Francisco.
    The Canadian dollar, which analysts expect will
continue to trend weaker against the greenback, finished the
session at C$1.1351, or 88.10 U.S. cents, down from Tuesday's
close of C$1.1299, or 88.50 U.S. cents.
    "We started getting a slight weakness in the Canadian dollar
late yesterday once the Senate vote on the Keystone pipeline
came out, said Sahota. "I think that just gave the market an
excuse - a psychological one ... that had a slight knock on the
    The bill for the TransCanada Corp pipeline fell just short
of the 60 votes needed for passage, and new legislation is
likely to be introduced next year. The pipeline, if approved,
would transport more than 800,000 barrels per day of oil from
the Alberta oil sands to the U.S. Gulf Coast.
    Weaker oil prices added further pressure on the currency.
    The Canadian price index for October, due on Friday, will be
the next focal point for market players. Forecasters expect
inflation to rise to 2.1 percent from 2 percent, and core
inflation to remain steady at 2.1 percent. 
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 3 Canadian
cents to yield 1.018 percent and the benchmark 10-year
 falling 29.5 Canadian cents to yield 2.030 percent.

 (Reporting by Solarina Ho; Editing by Lisa Von Ahn and Tom