* 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)
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