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Canadian dollar weakens 0.1% against the greenback

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For the quarter, the loonie advances 1.1%

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Price of U.S. oil settles 1 cent lower

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Canada's bond market closed for holiday

By Fergal Smith

TORONTO, Sept 30 (Reuters) - The Canadian dollar edged

lower against its U.S. counterpart on Monday as Federal Reserve

Chair Jerome Powell kept in check expectations for another

supersized interest rate cut, but the loonie held on to much of

its quarterly advance.

The loonie was trading 0.1% lower at 1.3530 to the

U.S. dollar, or 73.91 U.S. cents, after touching its weakest

level since Sept. 24 at 1.3537.

For the month, the currency lost 0.3%, while it notched a

third-quarter gain of 1.1%.

The Canadian dollar's move on Monday was "more related to

(U.S.) dollar strength" as investors reassessed prospects of

another larger-than-usual interest rate cut by year end, said

Amo Sahota, director at Klarity FX in San Francisco.

The U.S. dollar rose against a basket of major

currencies and U.S. bond yields climbed as Powell said that Fed

policy was not on a preset course and that the risks are

"two-sided".

Investors see a 65% chance the Fed will cut by a quarter of

a percentage point in November rather than repeating the

half-percentage-point move from earlier this month.

Speculators have cut their bearish bets on the Canadian

dollar to the lowest level since April, data from the U.S.

Commodity Futures Trading Commission showed on Friday.

As of Sept. 24, net short positions had decreased to 65,589

contracts from 73,150 in the prior week.

The price of oil, one of Canada's major exports,

settled 1 cent lower at $68.17 a barrel on Monday as concerns

about waning global demand offset fears of a widening Middle

East conflict.

Unionized workers have begun a three-day strike at two

terminals of the port of Montreal as talks over a new contract

have yet to result in a labor agreement.

Canada's bond market was closed for the National Day for

Truth and Reconciliation.