CANADA FX DEBT-Canadian dollar edges lower as oil hits five-month low

By Fergal Smith

TORONTO, Oct 16 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as oil prices fell and investors worried about the toll U.S. tariffs are taking on Canada's economy.

The loonie CAD= was trading 0.1% lower at 1.4050 per U.S. dollar, or 71.17 U.S. cents, after moving in a range of 1.4023 to 1.4060. On Tuesday, the currency touched a six-month low at 1.4079.

The United States-Mexico-Canada trade agreement has shielded much of Canada's exports from U.S. tariffs but some key sectors such as steel, aluminum and autos face punishing U.S. duties.

"We have started to see Canada chipped away at on the trade war," said Rahim Madhavji, president at KnightsbridgeFX.com.

STELLANTIS MOVING SOME PRODUCTION

On Tuesday, automaker Stellantis STLAM.MI said it would shift production of one model to a U.S. plant from a facility in Brampton, Ontario.

Prime Minister Mark Carney brushed off calls to retaliate against the United States over its tariffs on some Canadian exports, saying the two countries were deep in talks over key sectors.

"Falling oil prices today doesn't help. Falling equities today also doesn't help," Madhavji said.

Canada is a major producer of oil CLc1, which settled 1.4% lower at $57.46 a barrel, its lowest level in five months. Wall Street was pressured by signs of weakness in regional banks, while the U.S. dollar .DXY posted declines for a third straight day against a basket of major currencies.

Domestic housing data for September was mixed. Canadian home sales fell 1.7% last month from August, ending a string of increases that began in April, while housing starts rose 14%.

Canadian bond yields moved lower across the curve, tracking moves in U.S. Treasuries. The 10-year CA10YT=RR was down 4.3 basis points at 3.081%.