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CANADA FX DEBT-Canadian dollar gains ground as calm returns to Wall Street

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.3% against the greenback
    * Loonie touches its weakest intraday since Sept. 30 at
1.3340
    * Canada's Ivey PMI falls to a four-month low
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, Oct 7 (Reuters) - The Canadian dollar strengthened
against the greenback on Wednesday as calm returned to stock
markets after they were spooked one day earlier by fading hope
of U.S. stimulus, with the loonie rebounding from an earlier
one-week low.
    The Canadian dollar        was trading 0.3% higher at 1.3263
to the greenback, or 75.40 U.S. cents. Earlier in the session,
the currency touched its weakest level since Sept. 30 at 1.3340.
    The move higher for the loonie was "a function of the
risk-on improvement in equities," said Mark Chandler, head of
Canadian fixed income and currency strategy at RBC Capital
Markets. "The Canadian dollar was going along for the ride."
     Wall Street's main indexes jumped on hopes of at least a
partial deal on more fiscal stimulus after U.S. President Donald
Trump abruptly called off negotiations on a comprehensive bill
in the previous session.             
     Canada sends about 75% of its exports to the United States,
including oil. U.S. crude futures        settled 1.8% lower at
$39.95 a barrel, pressured by a larger-than-expected build in
U.S. inventories, while Canadian data showed that economic
activity expanded at a slower pace in September.
                        
    The seasonally adjusted Ivey Purchasing Managers Index fell
to 54.3, a four-month low, from 67.8 in August.
    Bank of Canada Governor Tiff Macklem is due to speak on
Thursday on the evolution of risks during a pandemic. Like some
other central banks, such as the Federal Reserve, the BoC has
been delivering the message that the economy needs fiscal
support but that additional help from monetary policy will be
available if needed.
    "I don't think he (Macklem) will deviate from that,"
Chandler said.    
    Canadian government bond yields were higher across a steeper
curve in sympathy with U.S. Treasuries. The 10-year            
rose 5 basis points to 0.620%.
    Canada's September jobs report is due on Friday.

 (Reporting by Fergal Smith; editing by Grant McCool)
  
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