CANADA FX DEBT-Canadian dollar hits a 10-day low as inflation cools

By Fergal Smith

TORONTO, Nov 17 (Reuters) - The Canadian dollar weakened to a 10-day low against its U.S. counterpart on Monday as the greenback posted broad-based gains and domestic data showed inflation pressures easing.

The loonie CAD= was trading 0.2% lower at 1.4050 per U.S. dollar, or 71.17 U.S. cents, its weakest level since November 7.

Canada's annual inflation rate in October fell to 2.2% from 2.4% in September as gasoline prices dropped and food price increases slowed. Analysts had forecast inflation easing to 2.1%.

"While headline inflation decelerated in October, the move was only broadly in line with expectations and it would take a longer period of easing price pressures, combined with indications of economic growth deteriorating again, to bring the Bank of Canada back off the sidelines," Andrew Grantham, a senior economist at CIBC Capital Markets, said in a note.

"We continue to forecast no change in the overnight rate through to the end of next year."

Last month, the Canadian central bank signaled its interest rate cutting campaign was on hold after lowering its benchmark rate to a three-year low of 2.25%.

Separate data showed Canadian home sales increased 0.9% in October from September as lower borrowing costs helped offset uncertain prospects for Canada's economy.

The U.S. dollar .DXY rose against a basket of major currencies but the move was limited ahead of what could be a busy week with the long-awaited return of U.S. economic data.

The price of oil CLc1, one of Canada's major exports, settled 0.3% lower at $59.91 a barrel as loadings resumed at Russia's Novorossiysk export hub.

Canadian bond yields were little changed across the curve. The 10-year CA10YT=RR was trading at 3.230% after touching its highest level since October 7 at 3.237%.