* C$ falls to 96.32 U.S. cents
* Bonds prices rise across curve
* Fed Beige Book indicates U.S. economy not robust (Updates to after Fed Beige Book release)
By Claire Sibonney
TORONTO, July 28 (Reuters) - The Canadian currency fell against the U.S. dollar on Wednesday, extending its decline after the Federal Reserve said some U.S. districts reported a slowing economy, signaling persistent headwinds for the global recovery and, in turn, riskier assets.
The Fed's latest Beige Book reported overall U.S. economic activity is still increasing but not robustly and in a few areas has lost steam. It pointed to sluggish housing markets and weakening sales of costly items like new cars. [ID:nWALSIE6ES]
"The Beige Book is not flagging a double-dip recession but it's also not painting a very flattering picture of the economy," said Sal Guatieri, senior economist at BMO Capital Markets.
"Unfortunately, we're not seeing any bounce in home sales even three months after the tax credit expired, we're not seeing much improvement in labor markets and ... still seeing tight credit standards and declining loans and the manufacturing sector, which has been a consistent bright spot in the U.S. economy," he said.
Before the report was released, the Canadian dollar had already given back gains from an earlier rally, in line with declining equity markets, as conflicting U.S. reports showed improved corporate earnings and falling orders for the most expensive manufactured goods.
As well, oil slipped towards $76 a barrel after economic and industry data fueled doubts over the pace of recovery in energy demand, which also weighed on the commodity-linked currency. [O/R] [MET/L]
At 2:52 p.m. (1852 GMT), the currency CAD=D4 was at C$1.0382 to the U.S. dollar, or 96.32 U.S. cents, down from Tuesday's finish at C$1.0362 to the U.S. dollar, or 96.51 U.S. cents.
"We are seeing the U.S. Treasury market rally a bit, so some money is coming out of equities because of growth concerns or double-dip fears, and if it's going into Treasuries, it's supporting the U.S. dollar, but consequently weighing on the Canadian dollar," said Guatieri.
Canadian bond prices edged up across the curve, following U.S. issues, which were further supported after a $37 billion auction of five-year notes met with healthy demand, with investors shrugging off low yields and high prices to bid strongly. [US/]
The Canadian two-year bond CA2YT=RR was up 8 Canadian cents to yield 1.601 percent, while the 5-year bond CA5YT=RR added 17 Canadian cents to yield 2.444 and the 10-year bond CA10YT=RR gained 33 Canadian cents to yield 3.233 percent. (Editing by Rob Wilson)