CANADA FX DEBT-Loonie weakens as worries rise about renewed virus lockdowns

    * Canadian dollar falls 0.3% against the greenback
    * Loonie trades in a range of 1.3525 to 1.3588
    * Price of U.S. oil decreases 0.8%
    * Canada's 2-year yield eases 2.5 basis points to 0.286%

    TORONTO, July 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Tuesday as investors grew more
worried about renewed coronavirus lockdowns slowing economic
recovery, with the loonie pulling back from a near two-week high
the day before.
    A five-day charge by world stocks          fizzled after
pandemic lockdown measures were reimposed in Melbourne,
Australia. It follows a surge in coronavirus cases in several
U.S. states, forcing some restaurants and bars to close again.
    The price of oil, one of Canada's major exports, fell amid
concerns that a surge in new cases will hamper any recovery in
fuel demand. U.S. crude        prices were down 0.8% at $40.31 a
    At 9:04 a.m. (1304 GMT), the Canadian dollar        was
trading 0.3% lower at 1.3570 to the greenback, or 73.69 U.S.
cents. The currency, which notched on Monday its strongest
intraday level since June 23 at 1.3616, traded in a range of
1.3525 to 1.3588.    
    Speculators have cut their bearish bets on the Canadian
dollar to the lowest since mid-March, data from the U.S.
Commodity Futures Trading Commission showed on Monday. As of
June 30, net short positions had decreased to 20,519 contracts
from 20,834 in the prior week.
    Canadian Prime Minister Justin Trudeau will not visit
Washington with Mexico's president this week to celebrate a new
North American trade deal, his office said on Monday, after
Canada raised concerns over potential U.S. aluminum tariffs.
    Canadian government bond yields were mixed across a steeper
curve on Tuesday, with the 2-year            down 2.5 basis
points at 0.286%.
    Canada's employment report for June is due on Friday, while 
   Canadian Finance Minister Bill Morneau is due to present a
fiscal snapshot on Wednesday.
    Canada's parliamentary budget watchdog has projected that
the budget deficit will soar to C$256 billion in the 2020-21
fiscal year from C$23.8 billion in 2019-210.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)