CANADA FX DEBT-Canadian dollar weakens along with oil prices, factory sales

    * Canadian dollar falls 0.1% against the greenback
    * Canadian factory sales decline 0.6% in November
    * Price of U.S. oil drops 0.6%
    * Canadian bond prices rise across flatter yield curve

    TORONTO, Jan 21 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday as oil prices fell and
domestic data showed that manufacturing sales dropped for the
third month in November.
    Canadian factory sales decreased by 0.6% in November from
October, impacted by rail transportation disruptions. That was
weaker than the 0.3% decline that analysts had forecast,
although there was an upward revision to the prior month.
    "Transitory factors aside, the second half of 2019 wasn't
kind to Canadian manufacturers," Josh Nye, a senior economist at
RBC Economics, said in a note.
    The manufacturing data could support a view that Canada's
economic growth slowed in the fourth quarter. 
    The Bank of Canada is due to update its outlook for the
economy on Wednesday, when it is expected to leave its benchmark
interest rate on hold at 1.75%.           
    The price of oil, one of Canada's major exports, fell on
expectations that a well-supplied market would be able to absorb
disruptions that have cut Libya's crude production to a trickle.
U.S. crude oil futures        were down 0.6% at $58.20 a barrel.
    At 8:54 a.m. (1354 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3065 to the greenback, or 76.54 U.S.
cents. The currency traded in a range of 1.3045 to 1.3077.
    The decline for the loonie came as mounting concern about a
new strain of coronavirus in China sent a ripple of risk
aversion through markets, with global stocks losing ground
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 4 Canadian cents to yield 1.630% and the 10-year
            was up 32 Canadian cents to yield 1.530%.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)