* Canadian dollar weakens 0.2% against the greenback
* Flash estimate shows Canadian factory sales up 1.9% in
June
* Price of U.S. oil rises 0.7%
* Canadian bond yields ease across a flatter curve
TORONTO, July 22 (Reuters) – The Canadian dollar edged lower
against its U.S. counterpart on Thursday, giving back some of
its gains over the last two days as dovish guidance from the
European Central Bank helped to boost the greenback against a
basket of major currencies.
The Canadian dollar was 0.2% lower at 1.2575 versus
the greenback, or 79.52 U.S. cents, after trading a range of
1.2529 to 1.2593.
The U.S. dollar broadly rose after the ECB’s pledge to keep
interest rates at record lows for even longer pressured the euro
, with the central bank warning that the Delta variant of
the novel coronavirus posed a risk to the euro zone’s recovery.

Canada is a major producer of commodities, including oil, so
threats to global economic growth could weigh on the loonie. On
Monday, the currency touched a five-month low at 1.2807.
Still, oil extended strong gains made in previous sessions
on expectations of tighter supplies until the end of the year.
U.S. crude prices were up 0.7% at $70.80 a barrel.

In domestic data, a preliminary estimate from Statistics
Canada showed that manufacturing sales rose 1.9% in June, led by
the transportation equipment industry.
The Canadian retail sales report for May is due on Friday,
which could offer further clues on the strength of the domestic
economy.
Canadian government bond yields eased across a flatter
curve, with the 10-year down 1.6 basis points at
1.206%. On Monday, it touched a five-month low at 1.097%.
(Reporting by Fergal Smith; editing by Barbara Lewis)
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