CANADA FX DEBT-C$ dips to hold near 7-week low ahead of more NAFTA talks

    * Canadian dollar at C$1.3189, or 75.82 U.S. cents
    * U.S. and Canada set for further talks on NAFTA trade pact
    * Bond prices mixed across the yield curve

    TORONTO, Sept 6 (Reuters) - The Canadian dollar edged lower
against the greenback on Thursday, hovering near its lowest in
nearly seven weeks ahead of further talks on the NAFTA trade
pact and a potential escalation of the U.S. trade dispute with
    Top U.S. and Canadian trade negotiators were set for a
second day of talks over a revised North American Free Trade
Agreement after their subordinates worked late into the night to
flesh out opportunities for a compromise deal.             
    On Wednesday, the Bank of Canada said it was closely
monitoring the NAFTA talks and other trade policy developments
as it held its policy interest rate at 1.50 percent.
    The U.S. dollar        edged down on Thursday after a bounce
in European currencies but investors said concerns about U.S.
President Donald Trump imposing further tariffs on Chinese
imports could lift the greenback.             
    Canada runs a current account deficit and exports many
commodities, so its economy could be hurt if the flow of global
capital or trade slows.
    The price of oil, one of Canada's major exports, was boosted
by a weaker U.S. dollar and evidence of strong U.S. fuel demand.
U.S. crude oil futures        were up 0.3 percent at $68.95 a
    At 9:22 a.m. (1322 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.3189 to the greenback, or 75.82
U.S. cents.
    The currency, which touched on Tuesday its weakest since
July 20 at C$1.3208, traded in a range of C$1.3165 to C$1.3200.
    The value of Canadian building permits decreased by 0.1
percent in July from June, Statistics Canada said.             
    Canada's jobs report for August is due on Friday.
    Canadian government bond prices were mixed across the yield
curve, with the 10-year             rising 5 Canadian cents to
yield 2.236 percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent was little changed at about 66 basis points in favor
of the U.S. bond, holding near its widest since July 30.    

 (Reporting by Fergal Smith; Editing by Bernadette Baum)