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CANADA FX DEBT-C$ hits near 4-week low as stocks fall, trade deficit widens

* Canadian dollar at C$1.2548, or 79.69 U.S. cents

* Loonie touches its weakest since Jan. 11 at C$1.2569

* Oil prices fall 1.1 percent

* Bond prices mixed across a steeper yield curve

TORONTO, Feb 6 (Reuters) - The Canadian dollar slipped to a nearly four-week low against its U.S. counterpart on Tuesday as a sell-off in global equity markets continued and oil prices fell, while domestic data showed a wider-than-expected trade deficit. Canada's trade deficit in December widened to C$3.19 billion as imports grew faster than exports, Statistics Canada said. Analysts had forecast a deficit of C$2.20 billion. Widening of the deficit toward the extreme levels seen in 2017 is a reason "we've been persistent bears on the $C," Nick Exarhos, an economist at CIBC Capital Markets, said in a research note. World stock markets nosedived for a fourth day running, having seen nerves about higher interest rates and overcooked valuations wipe $4 trillion off what just eight days ago had been record highs. Commodity-linked currencies, such as the Canadian dollar, tend to underperform when stocks fall, because of the signal that it sends on prospects for global economic growth. The price of oil, one of Canada's major exports, fell for a

third day. U.S. crude prices were down 1.1 percent at

$63.45 a barrel. At 9:12 a.m. EST (1412 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2548 to the greenback, or 79.69 U.S. cents. The currency's strongest level of the session was C$1.2505, while it touched its weakest since Jan. 11 at C$1.2569. In separate data, home sales in Toronto fell 22 percent in January from a year earlier as rising interest rates and tighter mortgage rules weighed on demand, but prices have stabilized as stubborn sellers and tight supply kept the correction in check.

Canadian government bond prices were mixed across a steeper

yield curve, with the two-year up 2 Canadian cents to yield 1.782 percent and the 10-year falling 28

Canadian cents to yield 2.328 percent. The gap between Canada's 10-year yield and its U.S. equivalent narrowed by 6.7 basis points to -43.5 basis points as Treasuries rallied on a flight to quality. Bank of Canada Senior Deputy Governor Carolyn Wilkins on Thursday will give a speech, which could offer the next clues on the outlook for interest rates. Canada's employment report for January is due on Friday.

(Reporting by Fergal Smith Editing by Jonathan Oatis)