Canadian dollar weakens for sixth day against US counterpart

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Canadian dollar weakens 0.6% against the greenback

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Touches its weakest since Aug. 16 at 1.3710

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Price of U.S. oil settles 0.5% lower

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10-year yield touches a 10-week high at 3.290%.

By Fergal Smith

TORONTO, - The Canadian dollar weakened to a near eight-week low against its U.S. counterpart on Wednesday as oil prices fell and after investors reduced their bets on the pace of expected interest rate cuts from the Federal Reserve.

The loonie was trading 0.6% lower at 1.37 to the U.S. dollar, or 72.99 U.S. cents, after touching its weakest level since Aug. 16 at 1.3710. It was the sixth straight day of declines for the currency, the longest daily losing streak since July.

"It's a disappointing run for the Canadian dollar," said Adam Button, chief currency analyst at ForexLive. "The bulk of the move has been on the U.S. dollar side as the market recalibrates Fed expectations."

The U.S. dollar held on to earlier gains against a basket of major currencies after minutes from the Fed's latest meeting showed that policymakers did not feel committed to continuing with unusually large half-percentage-point rate cuts.

The price of oil, one of Canada's major exports, settled 0.5% lower at $73.24 a barrel on rising U.S. crude inventories, but the risk of supply disruptions curbed price declines.

Investors were awaiting Canada's monthly employment report, due on Friday, which is expected to show the show the economy adding 27,000 jobs in September.

The data "may help settle expectations for the BoC policy at this month's meeting," Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

Investors expect the Bank of Canada to ease interest rates further at a policy decision on Oct. 23, and see a 30% chance that the central bank steps up the pace of easing to 50 basis points from 25 basis points.

Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 3.7 basis points at 3.272% after earlier touching its highest level since July 30 at 3.290%.

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