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Canadian dollar dips 0.1% against the greenback

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Touches an earlier 10-day high at 1.3719

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Price of U.S. oil decreases 0.5%

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Bond yields edge lower across the curve

By Fergal Smith

TORONTO, Aug 7 (Reuters) - The Canadian dollar edged

lower against its U.S. counterpart on Thursday, pulling back

from an earlier 10-day high, as oil prices dipped and ahead of

domestic employment data that could guide expectations for Bank

of Canada interest rate cuts.

The loonie was trading 0.1% lower at 1.3753 per U.S.

dollar, or 72.71 U.S. cents, after touching its strongest

intraday level since July 28 at 1.3719.

"Tomorrow's employment release is the main event: we expect

a sharp slowdown in job growth and a tick higher in the

unemployment rate, which should keep the Bank of Canada cautious

and cap further gains for the loonie," strategists at Monex

Europe said in a note.

Canada's employment report for July, due on Friday, is

expected to show a more moderate jobs gain of 13,500 after the

economy added 83,100 jobs in June.

Last week, the BoC opened the door to resuming interest rate

cuts if the upward price pressures from trade disruptions are

contained. Investors see a near 30% chance the central bank

eases next month.

"Everyone is trying to figure out the impact of tariffs, the

outlook on the Canadian economy," said Rahim Madhavji, president

at KnightsbridgeFX.com. "Oil prices are lower which is also a

headwind for CAD."

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

0.5% to $64.03 a barrel as expectations rose for a diplomatic

end to the war in Ukraine.

Domestic data was upbeat. The seasonally adjusted Ivey

Purchasing Managers Index (PMI) rose to 55.8 last month from

53.3 in June, posting its highest level since July 2024.

Still, Canadian bond yields edged lower across the curve.

The 10-year was down nearly one basis point at

3.400%.