CANADA FX DEBT-Canadian dollar consolidates prior day's gains as election looms

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Canadian dollar falls 0.1% against the greenback

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Trades in a range of 1.4298 to 1.4365

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Canada posts narrower-than-expected trade deficit

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Bond yields rise across a steeper curve

By Fergal Smith

TORONTO, Jan 7 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday as American economic data supported bets for a slower pace of interest rate cuts by the Federal Reserve, but the currency kept hold of much of the previous day's gains.

The loonie was trading 0.1% lower at 1.4350 per U.S. dollar, or 69.69 U.S. cents, after moving in a range of 1.4298 to 1.4365.

On Monday, the currency touched nearly a three-week high at 1.4280 as a report cast doubt on the severity of expected U.S. trade tariffs and Canadian Prime Minister Justin Trudeau announced his plans to resign.

A Canadian election is possible in the spring and must be held by Oct. 20, with polls showing voters will elect the opposition Conservatives.

"A change in the leadership in Canada is not a long-term negative for the loonie," said Amo Sahota, executive director at Klarity FX in San Francisco.

"People are looking at a new Conservative government which would probably be more pro-business, maybe less spending in there as well." The U.S. dollar gained on Tuesday against a basket of major currencies after economic data showed a generally stable jobs market and a robust services sector.

The price of oil, one of Canada's major exports, was supported by concerns over tighter supply from Russia and Iran. U.S. crude oil futures settled 0.9% higher at $74.25 a barrel. Canada posted a narrower-than-expected trade deficit of C$323 million ($225.6 million) in November as exports rose faster than imports. Separate data showed that the seasonally adjusted Ivey Purchasing Managers Index (PMI) rose to 54.7 from 52.3 in November, reaching its highest level since July.

Canadian bond yields moved higher across a steeper curve, tracking moves in U.S. Treasuries. The 10-year was up 7.3 basis points at 3.309%. (Reporting by Fergal Smith; Editing by Paul Simao)