* Canadian dollar gains 0.1% against the greenback * Canadian manufacturing sales fall by 2.0% in August * U.S. crude prices were down 0.9% at $40.59 a barrel * Canada's 10-year yield was nearly unchanged at 0.571% TORONTO, Oct 16 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday, recouping some of this week's decline, as investors cheered prospects for a COVID-19 vaccine and domestic data showed factory shipments falling in line with expectations. U.S. stock index futures rose after Pfizer said it could apply for emergency use of its COVID-19 vaccine candidate as early as November, while data showed stronger-than-expected retail sales growth last month. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to prospects for global economic recovery. U.S. crude prices were down 0.9% at $40.59 a barrel on concern that a spike in COVID-19 cases in Europe and the United States is curtailing demand in two of the world's biggest fuel consuming regions. Canadian manufacturing sales fell by 2.0% in August, following three months of consecutive gains, Statistics Canada said. Excluding transportation equipment, sales rose 1.1%. The Canadian dollar was trading 0.1% higher at 1.3206 to the greenback, or 75.72 U.S. cents, having traded in a range of 1.3191 to 1.3237. For the week, the loonie was on track to end 0.7% lower. Preserving Canada's triple-A credit rating could be less of a priority for Ottawa than in years gone by, with the focus on digging the economy out of a hole rather than staying in a shrinking group of top-rated sovereign borrowers, analysts say. Canadian government bond yields were mixed across the curve, with the 10-year nearly unchanged at 0.571%. (Reporting by Fergal Smith Editing by Nick Zieminski)
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