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Canadian dollar falls 0.3% against the greenback

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Manufacturing PMI drops to 7-month low

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Price of U.S. oil decreases 1%

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10-year yield hits a 7-month low

By Fergal Smith

TORONTO, Aug 1 (Reuters) - The Canadian dollar lost

ground against its broadly stronger U.S. counterpart on Thursday

as geopolitical tensions and weak manufacturing data globally

weighed on investor sentiment.

The loonie was trading 0.3% lower at 1.3850 to the

U.S. dollar, or 72.20 U.S. cents, moving back in reach of the

near nine-month low it posted on Monday at 1.3864.

"The moves in USD-CAD today are coming from the broad USD

strength, with the general risk off tone in markets exacerbated

by the headlines in the Middle East and U.S. data downside

misses," said Jayati Bharadwaj, a global FX strategist at TD

Securities.

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

currencies as rising geopolitical tensions provided a safe haven

boost to the currency, and Wall Street's major indexes fell.

Manufacturers across the United States, Europe and Asia

turned in a weak performance last month as factories grappled

with tepid demand, surveys showed, raising the risk of an

underpowered global economic recovery.

Canadian factory data was also downbeat. The S&P Global

Canada Manufacturing Purchasing Managers' Index (PMI) fell to

47.8 in July from 49.3 in June, posting its lowest level since

December.

Canada is a major producer of commodities, including oil, so

the loonie tends to be sensitive to the outlook for the global

economy.

The price of oil was trading 1% lower at $77.12 a

barrel as producer group OPEC+'s decision to keep its output

policy unchanged offset the threat of a wider Middle East

conflict.

Canadian government bond yields moved lower across the

curve, tracking a sharp decline in U.S. Treasury yields. The

10-year was down 3.8 basis points at 3.124%, after

earlier touching its lowest level since Dec. 29 at 3.110%.