Canadian dollar weakens for fourth day on broad-based buying of U.S. currency

TORONTO, Sept 4 (Reuters) - The Canadian dollar fell for a fourth straight day against its U.S. counterpart on Thursday, as a pick-up in U.S. services sector activity bolstered the greenback ahead of domestic jobs data that could guide bets for a Bank of Canada interest rate cut.

The loonie was trading 0.3% lower at 1.3830 per U.S. dollar, or 72.31 U.S. cents, after touching its weakest intraday level since August 27 at 1.3845.

"I think today's weakness is in large part a result of broad U.S. dollar buying that came in after the stronger-than-expected U.S. ISM services report," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull.

The Institute for Supply Management said its non-manufacturing purchasing managers index increased to 52.0 last month from 50.1 in July.

In contrast, Canada's services economy contracted for a ninth straight month in August as uncertainty over U.S. tariffs weighed on export sales and business confidence.

Separate data showed Canada's trade deficit narrowed to C$4.9 billion in July from C$6 billion in June as exports rose for a third straight month.

"Zooming out, employment data is probably what markets are focused on most right now as opposed to prices and inflation, just because last month's NFP (U.S. nonfarm payrolls report) was so shockingly bad," Bregar said.

U.S. and Canadian employment data for August are set for release on Friday. Economists forecast that Canada's economy added 10,000 jobs and the unemployment rate increased to 7%.

Investors see a 65% chance the BoC will lower interest rates this month for the first time since March. <0$CADIRPR>

The Canadian dollar is set to strengthen over the coming year as the BoC potentially cuts just two more times in the current easing campaign and expected rate cuts from the U.S. Federal Reserve help stimulate Canada's economy, a Reuters poll found.

The Canadian 10-year yield was down 3.6 basis points at 3.358%, after earlier touching its lowest level since July 4 at 3.340%.

Reporting by Fergal Smith; Editing by Richard Chang

Reuters

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Canadian dollar weakens for fourth day on broad-based buying of U.S. currency

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