(Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar weakens 0.1% against the greenback
    * Canada's trade deficit narrows in November 
    * Price of U.S. oil settles up 0.4%
    * Canada's 10-year bond yield climbs to one-month high

    By Fergal Smith
    TORONTO, Jan 7 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, retreating from near a
three-year high the day before, as the greenback rallied against
a basket of major currencies, while data showed Canada's trade
deficit narrowing in November.
    The loonie        was trading 0.1% lower at 1.2682 to the
greenback, or 78.85 U.S. cents. The currency traded in a range
of 1.2663 to 1.2733. On Wednesday, it touched its strongest
level since April 2018 at 1.2626.
    "General USD strength was the driver," Ronald Simpson,
managing director, global currency analysis at Action Economics,
said in a note. "The slightly narrower Canadian (trade)
shortfall had little impact."
    The U.S. dollar        rebounded from levels not seen since
March 2018 to its highest in a week, helped by profit-taking by
investors who had been betting on the euro.             
    Canada's trade deficit narrowed to C$3.3 billion in November
from a revised C$3.7 billion in October as exports increased and
imports edged down, data from Statistics Canada showed.
            
    One of Canada's major exports, oil, rose to an 11-month
high. It was supported by Saudi Arabia's unexpected pledge to
deepen its oil cuts, with the market shrugging off political
unrest in the United States.              
    U.S. crude oil futures        settled 0.4% higher at $50.83
a barrel, while global shares          and U.S. bond yields rose
on bets of more pandemic-related financial relief under a
Democratic-controlled U.S. Congress.             
    Canadian government bond yields were higher across a steeper
curve. The 10-year             rose 3.3 basis points to 0.791%,
having touched its highest intraday level since Dec. 7 at
0.807%.
    Canada's jobs report for December is due on Friday. It could
offer clues on how well the domestic economy is coping with
tightening provincial restrictions to help contain a second wave
of the coronavirus pandemic.

 (Reporting by Fergal Smith; Editing by Paul Simao and Peter
Cooney)