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CANADA FX DEBT-Canadian dollar strengthens as global risk aversion subsides

    * Canadian dollar rises 0.2% against the greenback
    * Loonie trades in a range of 1.3156 to 1.3212
    * Price of U.S. oil increases 0.4% 
    * Canadian bond yields ease across much of a flatter curve

    TORONTO, Oct 27 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Tuesday as stocks and oil prices
rose, with the currency rebounding from a 10-day low the day
before when a wave of risk aversion swept global markets.
    Wall Street's main indexes were set to bounce following the
benchmark S&P 500's worst day in a month as investors parsed
through a deluge of corporate earnings, while bracing for
volatility ahead of Election Day.             
    Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to investor risk appetite.
    U.S. crude oil futures        were up 0.4% at $38.7 a barrel
as oil companies shut down some U.S. Gulf of Mexico oil output
due to a hurricane, although surging coronavirus infections and
rising Libyan supply limited gains.             
    The Canadian dollar        was trading 0.2% higher at 1.3176
to the greenback, or 75.90 U.S. cents, having traded in a range
of 1.3156 to 1.3212. On Monday, the currency touched its weakest
intraday level since Oct. 16 at 1.3225.   
    The Bank of Canada is due to make an interest rate decision
and update its economic outlook on Wednesday. The central bank
has said it will leave rates at a record low of 0.25% until its
2% inflation target is achieved sustainably, which it does not
expect for at least two years.
    Canadian government bond yields were lower across much of a
flatter curve in sympathy with U.S. Treasuries. The 10-year
            fell nearly 1 basis point to 0.620%, having pulled
back from an eight-week high on Friday at 0.680%. 

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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