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* Canadian dollar weakens 0.2% against the greenback
* Canadian manufacturing sales rise by a record 20.7% in June
* Price of U.S. oil decreases 0.5%
* Canadian bond yields ease across a flatter curve
By Fergal Smith
TORONTO, Aug 14 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday as investor worries about prospects for the global economy offset domestic data showing a record gain for factory sales, but the loonie held on to most of this week's rally.
Global stocks .WORLD dipped as data out of China, the euro zone and the United States put a lid on expectations for a sustained global rebound, with traders already worried about a delay in U.S. fiscal stimulus. runs a current account deficit and is a major exporter of commodities, including oil, so the loonie CAD= tends to be sensitive to the global flow of trade and capital.
The currency was trading 0.2% lower at 1.3248 to the greenback, or 75.48 U.S. cents. The currency, which on Thursday notched a 6-1/2-month high at 1.3188, traded in a range of 1.3206 to 1.3270. For the week, the loonie advanced 1%.
Higher commodity prices and strong economic data "underpinned Canadian dollar strength this week," said Michael Goshko, corporate risk manager at Western Union Business Solutions.
Canadian manufacturing sales rose 20.7% in June as many factories operated at a much higher capacity than in May. crude CLc1 prices settled 0.5% lower at $42.01 a barrel but held close to their highest levels since March. commodity prices for Canadian exports creates greater external demand for the (Canadian) dollar," Goshko said.
The United States will extend a ban on non-essential travel at land borders with Canada and Mexico for another 30 days as several states struggle to contain the coronavirus outbreak, a top U.S. official confirmed.
Canadian government bond yields were lower across a flatter curve, with the 10-year CA10YT=RR down 2.4 basis points at 0.615%. On Thursday, it reached its highest intraday level in more than two months at 0.642%.