CANADA FX DEBT-C$ hovers near 7-week low as NAFTA trade talks resume

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar at C$1.3187, or 75.83 U.S. cents
    * Bank of Canada leaves its policy rate at 1.50 percent
    * Canada and U.S. reopen talks to salvage NAFTA trade pact
    * Price of U.S. oil falls 1.7 percent

    By Fergal Smith
    TORONTO, Sept 5 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Wednesday, holding near
its lowest in nearly seven weeks as the Bank of Canada left
interest rates unchanged and investors focused on talks to
revamp the NAFTA trade pact.
    The Bank of Canada said it was closely monitoring the North
American Free Trade Agreement (NAFTA) negotiations and other
trade policy developments as it held its policy interest rate at
1.50 percent.
    The central bank, which has raised interest rates four times
since July 2017, said more hikes would be needed to keep
inflation on target.             
    "I think the market went into the meeting expecting pretty
much what it got, that the Bank of Canada would leave rates on
hold and that they would do nothing to discourage the market
from its pricing for an October hike," said Daniel Katzive, head
of FX strategy North America at BNP Paribas in New York.
    "There is a big question mark related to NAFTA and I think
that's what the focus is on now," Katzive said.     
    The United States and Canada reopened talks in a bid to
salvage NAFTA amid a threat by U.S. President Donald Trump to
proceed alone with a new pact with Mexico.             
    At 3 p.m. (1900 GMT), the Canadian dollar          was
trading nearly unchanged at C$1.3187 to the greenback, or 75.83
U.S. cents.
    The currency, which touched its weakest since July 20 on
Tuesday at C$1.3208, traded in a range of C$1.3156 to C$1.3207. 
    Canada posted its smallest trade deficit in more than 1-1/2
years in July as exports were boosted by higher prices for crude
oil, Statistics Canada said.             
    Global stocks fell as investors weighed the possibility of
Trump following through on plans to impose a fresh round of
tariffs on Chinese goods right after a public comment period
ends on Thursday.             
    Canada runs a current account deficit, so its economy could
be hurt if the global flow of trade or capital slows.
    Still, the country's currency is likely to rally over the
coming months, according to foreign exchange strategists in a
Reuters poll, who forecast that trade uncertainty will fade.
    The price of oil       , one of Canada's major exports,
settled 1.7 percent lower.             
    Canadian government bond prices were mixed across a steeper
yield curve, with the 10-year             falling 1 Canadian
cent to yield 2.237 percent.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)