CANADA FX DEBT-Canadian dollar posts longest daily losing streak in 10 months as oil falls

By Fergal Smith

TORONTO, Jan 7 (Reuters) - The Canadian dollar weakened for a seventh straight day against its U.S. counterpart on Wednesday as the prospect of increased Venezuelan oil exports undercut the appeal of the commodity-linked Canadian currency.

The loonie CAD= was trading 0.2% lower at 1.3840 per U.S. dollar, or 72.25 U.S. cents, its weakest level since December 10. The currency has weakened each trading data since December 29, posting its longest daily losing streak since March last year.

"The market has a hard time pricing in big geopolitical changes and Canada was caught up in that with Venezuela," said Adam Button, chief currency analyst at investingLive.

The Toronto Stock Exchange's energy sector .SPTTEN has fallen 5.7% since the start of the week as investors worry that a boost in Venezuelan oil exports to the United States could hurt Canadian companies that sell a similar heavy oil.

The price of oil settled 2% lower at $55.99 a barrel as investors weighed a U.S. deal to import Venezuelan crude.

"There is going to be a sober second assessment that shows that Canadian oil is far more competitive, far more stable and not threatened on any medium-term horizon," Button said.

Canadian Prime Minister Mark Carney will visit China January 13-17, his office said. Carney is trying to diversify Canada's exports away from its main market, the United States, as Canada faces uncertain U.S. trade policy.

Canada's trade data for October is due on Thursday. Economists expect the trade balance to swing to a deficit of C$1.4 billion, after it posted a surprise surplus in September.

Canadian bond yields moved lower across a flatter curve. The 10-year CA10YT=RR was down 4.3 basis points at 3.389%.