CAD-CAD DEBT DROP, consolidating gains related to commercial optimism

      * Canadian Dollar at CA $ 1.3054, or US $ 76.60
* Bond prices are higher on a flatter yield curve
* The 10-year gap between Canada and the United States increases by 3.5 basis points

TORONTO, July 26 (Reuters) - The Canadian dollar has fallen slightly
against the greenback on Thursday, consolidating its gains
driven by the optimism of the eve trade, as data pointing
Strong spending in the United States boosted the greenback.
The US dollar rebounded after a two-week low
intraday against a basket of major currencies after the data showed
new orders for key equipment goods made in the United States increased by more than
expected in June and shipments jumped.
At 0921 EDT (1321 GMT), the Canadian dollar
was down 0.1% to C $ 1.3054 against the greenback, or
76.60 US cents.
On Wednesday, the currency touched its strongest near
six weeks at CAN $ 1.3025 after Canadian and Mexican policymakers
said that they were optimistic about the prospects for North America
Free Trade Agreement and decisive progress in trade negotiations between the United States and the European Union.

Canada has a current account deficit, so its economy could
to be hurt if the flow of trade or capital slows down.
The loonie again hit the $ 1.3025 level Thursday,
while the lowest was $ 1.3061 CAN.
US Crude Oil Futures Down 0.1% to $ 69.25
barrel even as Saudi Arabia has suspended its oil shipments through
a Strait of the Red Sea in response to an attack on two of
the oil tankers of the country.
Oil is one of Canada's major exports.
Canadian government bond prices were higher across a flatter
the yield curve, with a two-year Canadian cent
yield 2.055 percent and increase 10 years 10
Canadian cents to report 2.285%.
The gap between Canada's 10-year yield and its United States
the equivalent has widened by 3.5 basis points to expand to 67.5
points in favor of the US link.

(Report by Fergal Smith, edited by Bernadette Baum)