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CANADA FX DEBT-C$ pares weekly decline as investors cheer vaccine progress

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar gains 0.3% against the greenback
    * For the week, the loonie declines 0.5%
    * Canadian manufacturing sales fall by 2.0% in August
    * Canada's 10-year yield was unchanged at 0.572%

    By Fergal Smith
    TORONTO, Oct 16 (Reuters) - The Canadian dollar gained
ground against its broadly weaker U.S. counterpart on Friday as
signs of progress on developing a COVID-19 vaccine boosted
investor sentiment, with the loonie clawing back some of this
week's decline.
    The Canadian dollar        was trading 0.3% higher at 1.3180
to the greenback, or 75.87 U.S. cents, having traded in a range
of 1.3177 to 1.3237. For the week, the loonie was down 0.5%.    
    "The usual suspects" were behind the currency's move higher
on Friday, including a weaker U.S. dollar and increased risk
appetite, said Ronald Simpson, managing director, global
currency analysis at Action Economics.
    Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.
    Wall Street bounced back after three straight days of losses
as a positive update from Pfizer on development of its COVID-19
vaccine tempered worries that a resurgent pandemic would derail
economic recovery. Data showing stronger-than-expected U.S.
retail sales growth last month added to positive sentiment.
            
    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%.            
    U.S. crude oil futures        settled 0.2% lower at $40.88 a
barrel on concern that a spike in COVID-19 cases in Europe and
the United States would curtail demand in two of the world's
biggest fuel consuming regions.                    
    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             unchanged at 0.572%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Sandra Maler)
  
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