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CANADA FX DEBT-C$ hits a 6-week low as oil slumps on tariff threat

Levent Uslu

(Adds market player quotes and details throughout, updates prices) Canadian dollar falls 0.2% against the greenback

* Oil prices decrease by 7.9%

* Bond prices move higher across the maturity curve

TORONTO, Aug 1 (Reuters) - The Canadian dollar weakened to a six-week low against its U.S. counterpart on Thursday as oil prices slumped, pressured by the prospect of additional U.S. tariffs on Chinese goods. In a series of tweets, U.S. President Donald Trump said he would slap 10% tariffs on $300 billion of Chinese imports starting Sept. 1. Trump's comments had a "knock-on effect on commodities, particularly oil," said Michael Goshko, corporate risk manager at Western Union business solutions. "The Canadian dollar is a particularly oil-sensitive currency." The price of oil, one of Canada's major exports, fell to the lowest level in about six weeks. U.S. crude oil futures settled 7.9% lower at $53.95 a barrel.

At 4:39 p.m. (2039 GMT), the Canadian dollar was

trading 0.2% lower at 1.3213 to the greenback, or 75.68 U.S. cents. The currency, which fell 0.8% against the U.S. dollar in July, hit its lowest intraday level since June 20 at 1.3248. The loonie lost ground despite data showing that Canadian manufacturing activity expanded for the first time in four months in July. The IHS Markit Canada Manufacturing Purchasing Managers' index (PMI) rose to a seasonally adjusted 50.2 last month from 49.2 in June. The PMI data helped limit the decline for the Canadian dollar, said Simon Harvey, a market analyst at Monex Canada and Monex Europe. Firm domestic data has supported the Bank of Canada's view that the economy is picking up, Harvey said. Canadian government bond prices were higher across the yield

curve, with the two-year up 13 Canadian cents toyield 1.479% and the 10-year rising 74 Canadian

cents to yield 1.399%.

(Reporting by Levent Uslu; Editing by Peter Cooney)