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Canadian dollar gains 0.3% against the greenback

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For the week, the loonie weakens 0.1%

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Price of oil settles 0.1% higher

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10-year yield touches a 5-1/2-month low at 3.062%

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 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.

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

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 was little changed at

3.084%, after earlier touching its lowest level since April 30

at 3.062%.