* Canadian dollar at C$1.3144, or 76.08 U.S. cents
* Bond prices higher across flatter yield curve
TORONTO, Aug 16 (Reuters) - The Canadian dollar was nearly unchanged against its U.S. counterpart on Thursday after a planned oil pipeline from Alberta to Nebraska met with a setback, offsetting domestic data that showed a rise in factory sales.
A federal judge in Montana on Wednesday ordered the U.S. State Department to do a full environmental review of a revised route for a phase of the Keystone XL crude oil pipeline, which, when completed, would carry heavy crude to Steele City in Nebraska from Canada's oilsands in Alberta. pipeline could help reduce transport bottlenecks for Canadian oil, which trades at a discount to the price of U.S. crude.
Canadian factory sales grew by 1.1 percent in June from May, thanks largely to a rebound in petroleum and coal products after temporary shutdowns in the spring, Statistics Canada said. 9:37 a.m. EDT (1337 GMT), the Canadian dollar CAD=D4 was trading near flat at C$1.3144 to the greenback, or 76.08 U.S. cents.
The currency, which lagged many other "G10" currencies on Wednesday, traded in a range of C$1.3114 to C$1.3164. On Monday, it neared a three-week low of C$1.3179.
Mexico's economy minister on Wednesday said that Mexico and the United States may not meet an August goal to finish bilateral talks to revamp the North American Free Trade Agreement, which includes Canada and is threatened by disagreements over automobile trade rules and other issues. U.S. dollar weakened against a basket of other major currencies as news that a Chinese delegation will travel to the United States for trade talks prompted investors to buy back into currencies hit hard in a selloff in recent days. crude oil futures CLc1 were up 0.1 percent at $65.09 a barrel. Oil is one of Canada's major exports.
Canadian government bond prices were higher across a flatter yield curve, with the two-year CA2YT=RR up 0.5 Canadian cent to yield 2.087 percent and the 10-year CA10YT=RR rising 15 Canadian cents to yield 2.252 percent.