CANADA FX DEBT-C$ extends weekly decline as investors weigh U.S.-China relations

    * Canadian dollar weakens 0.2% against the greenback
    * For the week, the loonie was on track to fall 1.3%
    * Price of U.S. oil increases 2.4%
    * Canadian bond yields were mixed across a flatter curve

    TORONTO, May 15 (Reuters) - The Canadian dollar added to
this week's decline against its U.S. counterpart on Friday as
fear that trade tensions between the United States and China
could ramp up offset higher oil prices.
    U.S. stock index futures fell after the Trump administration
moved to block shipments of semiconductors to China's Huawei
Technologies from global chipmakers. A renewed Sino-U.S. trade
war could exacerbate the economic downturn caused by the
coronavirus outbreak.             
    Canada runs a current account deficit and it is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.    
    U.S. crude oil futures        were up 2.4% at $28.23 a
barrel amid signs demand for crude was picking up, with China
reporting increased refinery runs and rounding out a week of
bullish news on the supply front.             
    At 8:44 a.m. (1244 GMT), the Canadian dollar          was
trading 0.2% lower at 1.4081 to the greenback, or 71.02 U.S.
cents. The currency, which was on track to fall 1.3% for the
week, traded in a range of 1.4019 to 1.4110.
    The Bank of Canada, which has slashed interest rates to near
zero, will release the results of its senior loan officer survey
at 10:30 a.m. (1430 GMT). The survey collects information on the
business-lending practices of Canadian financial institutions.
    On Thursday, the central bank said in an annual review of
Canada's financial systems that "access to liquidity has greatly
improved in key financial markets" even as it expressed concern
over vulnerabilities in the energy sector.             
    Canadian government bond yields were mixed across a flatter
curve, with the 10-year             down 1.7 basis points at
0.510%.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  

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