CANADA FX DEBT-C$ slips as oil, U.S. stock index futures retreat

    * Canadian dollar at C$1.2527, or 79.83 U.S. cents
    * Bond prices higher across a flatter yield curve

    TORONTO, Feb 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as oil prices and U.S.
stock index futures fell, while the greenback broadly rose.
    At 8:50 a.m. EST (1350 GMT), the Canadian dollar         
was trading 0.3 percent lower at C$1.2527 to the greenback, or
79.83 U.S. cents.
    The currency traded in a range of C$1.2491 to C$1.2528.
    World stocks clawed off two-month lows, though momentum was
weak and U.S. futures suggested Wall Street could backslide
again after rebounding from the biggest selloff in six years.
    Commodity-linked currencies, such as the Canadian dollar,
tend to underperform when stocks fall, because of the signal
that it sends on prospects for global economic growth.
    The loonie has retreated about 2 percent since stocks began
to head sharply lower on Friday. One week ago, the currency
touched its strongest in more than four months at C$1.2250.
    The price of oil, one of Canada's major exports, fell as the
boost from a report showing a drop in U.S. crude inventories
last week was offset by evidence of soaring U.S. output.
    U.S. crude        prices were down 0.33 percent at $63.18 a
    The U.S. dollar        rose against a basket of major
currencies as disappointment over reports that the leader of
Germany's Social Democrats would not be taking over as finance
minister for Europe's biggest economy weighed on the euro.
    The value of Canadian building permits jumped by 4.8 percent
in December from November, Statistics Canada said. Analysts had
expected an increase of 2.0 percent.                 
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 0.5 Canadian cent
to yield 1.837 percent and the 10-year             rising 11
Canadian cents to yield 2.35 percent.
    On Monday, the 10-year yield touched its highest intraday
level since May 2014 at 2.393 percent.
    Bank of Canada Senior Deputy Governor Carolyn Wilkins on
Thursday will give a speech, which could offer the next clues on
the outlook for interest rates. Canada's employment report for
January is due on Friday.

 (Reporting by Fergal Smith)