CANADA FX DEBT-Loonie sticks to narrow range as housing sector shows momentum

Fergal Smith

* Canadian dollar trades near flat against greenback

* Canadian housing starts fall 2.5% in September

* Price of U.S. oil decreases 1.4%

* Canadian bond prices rise across the yield curve

TORONTO, Oct 8 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday, trading in a narrow range as investors worried about U.S.-China trade talks this week and domestic data showed a smaller-than-expected decline in housing starts. Canadian housing starts in September fell 2.5% from the previous month to 221,202 units, according to data from the national housing agency. Economists had expected starts to fall to 214,500 units. "Canada's housing sector is back on the front foot with resales picking up as the year progresses and homebuilding activity clearly displaying some momentum," Josh Nye, a senior economist at Royal Bank of Canada, said in a note. Separate data, from Statistics Canada, showed that the value of Canadian building permits rose by 6.1% in August from July.

Global stocks edged lower for the second straight

session after a report that the Trump administration was moving ahead with discussions around possible curbs on capital flows into China stirred up fresh worries over the outcome of the high-level trade talks later this week. Canada is a major exporter of commodities, including oil, so its economy could suffer from prolonged uncertainty in global trade.

U.S. crude oil futures were down 1.4% at $51.99 a

barrel on dampened hopes for a U.S.-China trade deal, though unrest in Iraq and Ecuador lent some support to crude prices.

At 9:12 a.m. (1312 GMT), the Canadian dollar was

trading nearly unchanged at 1.3306 to the greenback, or 75.15 U.S. cents. The currency traded in a range of 1.3289 to 1.3326. Canada's employment report for September, due on Friday, can help guide expectations for the Bank of Canada policy outlook. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 5.5 Canadian cents to yield 1.429% and the 10-year was up 36 Canadian cents to yield 1.261%.

(Reporting by Fergal Smith Editing by Mark Heinrich)