(Adds analyst quotes and details on activity; updates prices)
* Canadian dollar weakens 0.7 percent against the greenback
* Canadian manufacturing sales fall 0.4 percent
* Price of U.S. oil declines 3 percent
* Canadian bond prices fall across steeper yield curve
By Fergal Smith
TORONTO, Oct 17 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from an
11-day high the day before as oil prices tumbled and minutes
from the Federal Reserve's latest meeting boosted the greenback.
The price of oil, one of Canada's major exports, was
pressured by a jump in U.S. crude stockpiles. U.S. crude oil
futures settled 3 percent lower at $69.75 a barrel.
"Oil has been the main driver of the loonie on the day,"
said Amo Sahota, director at Klarity FX in San Francisco. "It
boils down to what is happening with oil and what is happening
with interest rates."
The U.S. dollar index rose to its highest levels in a
week after minutes from the Fed's September meeting affirmed
expectations the U.S. central bank would likely keep raising
interest rates.
The Bank of Canada has also been tightening. Economists
expect the central bank to hike rates next week for the fifth
time since July 2017, a Reuters poll showed.
Economists said the country's economy would continue to grow
faster than its potential over the coming quarters as U.S.
fiscal stimulus boosts demand for its exports.
At 4:30 p.m. (2030 GMT), the Canadian dollar was
trading 0.7 percent lower at 1.3021 to the greenback, or 76.80
U.S. cents.
The currency, which on Tuesday touched its strongest level
since Oct. 5 at 1.2915, traded in a range of 1.2933 to 1.3023.
The decline for the loonie came as data from Statistics
Canada showed that domestic factory sales fell by 0.4 percent in
August from July, weighed by lower motor vehicle sales as a
result of atypical assembly plant shutdowns. Analysts had
forecast a decrease of 0.6 percent.
Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries, with the 10-year
falling 15 Canadian cents to yield 2.520 percent.
Canadian inflation data for September and the August retail
sales report are due on Friday.
(Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter
Cooney)
