TORONTO, Sept 4 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday after the Bank of Canada cut interest rates as expected and after the release of U.S. economic data that pressured the American currency.
The loonie was trading 0.3% higher at 1.3515 to the U.S. dollar, or 73.99 U.S. cents, after moving in a range of 1.3501 to 1.3565.
The Bank of Canada lowered its key policy rate by 25 basis points to 4.25%, and Governor Tiff Macklem, citing weak growth, said a larger cut could be in order if the economy needs a boost.
"The CAD took the (rate) decision pretty much in its stride - reflecting the BoC's well-telegraphed easing intentions as well as the market's reaction to some soft U.S. data that dropped a little after the rate announcement," Shaun Osborne, chief currency strategist at Scotiabank, said in a note.
The U.S. dollar (.DXY), opens new tab fell against a basket of major currencies as U.S. job openings data for July pointed to a softening labor market, tilting the odds further in favor of larger interest rate cuts by the Federal Reserve.
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Canada posted a trade surplus of C$684 million in July as imports fell faster than exports, with the trade balance swinging from a deficit in revised data for the previous month.
The price of oil, one of Canada's major exports, fell 1.3% to $69.40 a barrel as the U.S. data and recent lackluster data from China fed expectations for a weaker global economy.
Canadian Prime Minister Justin Trudeau suffered an unexpected blow when the small political party helping keep his minority Liberal government in power withdrew its support.
Canadian bond yields fell across the curve, tracking moves in U.S. Treasuries. The 2-year was down 8.2 basis points at 3.163%, its lowest level since Aug. 2.
Reporting by Fergal Smith; Editing by Leslie Adler