* Canadian dollar falls 0.3% against the greenback * Canada posts a trade deficit of C$3.3 billion in September * Price of U.S. oil increases 2.3% * Canadian bond yields ease across a flatter curve TORONTO, Nov 4 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday after a tight U.S. election that could reduce prospects of a large economic stimulus package, with the currency pulling back from an earlier two-week high. The U.S. bond market moved to price a greater chance of U.S. policy gridlock, sensing that Democrats may not have enough support in the Senate to push through the large coronavirus relief package that some investors had hoped for, while the White House race remained in the balance. A large economic package would bolster prospects for Canada's commodity-linked currency, FX strategists said in a Reuters poll. The Canadian dollar was trading 0.3% lower at 1.3174 to the greenback, or 75.91 U.S. cents. Earlier, the currency touched its strongest level since Oct. 21 at 1.3095. Canada posted a trade deficit of C$3.3 billion in September as both exports and imports increased, Statistics Canada said. Canada's jobs report for October is due on Friday. U.S. crude prices were up 2.3% at $38.51 a barrel. Oil is one of Canada's major exports. Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year fell 6.8 basis points to 0.623%, pulling back from Tuesday's two-month intraday high at 0.694%. (Reporting by Fergal Smith; Editing by Andrea Ricci)
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