CANADA FX DEBT-Canadian dollar gains but still posts fourth straight weekly decline

By Fergal Smith

TORONTO, Oct 17 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday as stocks and oil prices rose, but the currency's move was not enough to snap a weekly losing streak.

The loonie CAD= was trading 0.3% higher at 1.4015 per U.S. dollar, or 71.35 U.S. cents, recovering some ground after it touched on Tuesday a six-month low at 1.4079.

For the week, the currency was down 0.1%, its fourth straight weekly decline. Equity market volatility has picked up in recent days while domestic economic data has been mixed, including monthly declines for wholesale trade and manufacturing sales.

"It's still consistent with an economy that will likely eke out a smallish gain in Q3," said Bipan Rai, head of ETF and alternatives strategy at BMO Global Asset Management.

"You could argue that the risks are still there for the Bank (of Canada) to ease later this month and if not later this month, certainly in December."

Investors expect one further interest rate cut from the BoC this year. The central bank's next rate decision is on October 29. 0#CADIRPR

Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to the signals that stocks send about the economic outlook.

Wall Street rose on Friday, while the price of oil CLc1 settled 0.1% higher at $57.54 a barrel, clawing back a small part of its weekly decline.

Senior Canadian and Chinese officials discussed bilateral trade disputes involving canola and electric vehicles on Friday, Ottawa said, but gave no indication of any immediate breakthrough.

The Canadian 10-year yield CA10YT=RR was little changed at 3.084%, after earlier touching its lowest level since April 30 at 3.062%.