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CANADA FX DEBT-Canadian dollar steadies as data shows pullback in exports

    * Canadian dollar trades near flat against greenback
    * Loonie touches strongest intraday since Sept. 21 at 1.3242
    * Canada's trade deficit narrows in August to C$2.45 billion
    * Canadian bond yields ease across flatter curve

    By Fergal Smith
    TORONTO, Oct 6 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday as oil prices
rose and data showed a slowdown in Canada's merchandise trade,
with the loonie steadying after it notched an earlier two-week
high.
    Canada's trade deficit narrowed slightly in August to C$2.45
billion from a revised C$2.53 billion in July, Statistics Canada
said. Exports and imports fell after two months of strong
growth.             
    "Trade volumes still have a way to go before returning to
pre-COVID levels," said Ryan Brecht, a senior economist at
Action Economics.
    One of Canada's major exports is oil. Its price was up for a
second straight day amid supply disruptions in Norway, a new
hurricane in the Gulf of Mexico, and U.S. President Donald
Trump's return to the White House after being treated for
COVID-19 in a military hospital.             
    U.S. crude        prices were up 2.4% at $40.16 a barrel,
while the Canadian dollar        was trading nearly unchanged at
1.3260 to the greenback, or 75.41 U.S. cents. It touched its
strongest intraday level since Sept. 21 at 1.3242.
    Separate data showed that home sales in the area of Toronto,
Canada's most populous city, rose for the third consecutive
month in September. Low borrowing costs and pent-up demand
lifted transactions by 42% from a year ago, helping to break
average sale price records for the fourth straight month.
            
    The September employment report is due on Friday, which can
help guide expectations for the strength of the economic
recovery. Bank of Canada Governor Tiff Macklem is scheduled to
speak on Thursday.
    Canadian government bond yields were lower across a flatter
curve on Tuesday, with the 10-year             falling 1.6 basis
points to 0.609%. Earlier in the day, it touched its highest
level since Sept. 1 at 0.631%.

 (Reporting by Fergal Smith
Editing by Paul Simao)
  
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