The Canadian dollar weakened to a three-week low against its U.S. counterpart on Tuesday as the greenback notched broad-based gains and data showed activity in Canada's manufacturing sector slowing for a third straight month.
The loonie was trading 0.8% lower at 1.3293 to the greenback, or 75.23 U.S. cents, after touching its weakest intraday level since July 10 at 1.3300.
"The (U.S.) dollar is reasserting itself as the champion of the currency market and the Canadian dollar is just caught in that wave," said Adam Button, chief currency analyst at ForexLive. "We are starting to see cracks in the Canadian economy but not in the U.S."
Relatively solid data on U.S. manufacturing and construction helped underpin the U.S. dollar (.DXY) as global data showed factory activity remaining in a slump in July.
S&P Global's measure of Canadian manufacturing activity edged higher last month to 49.6 from 48.8 in June. Still, a reading below 50 indicates contraction in the sector. It has been below that level since May.
It follows preliminary data on Friday that showed the economy shrinking 0.2% in June.
Canada's employment report for July, due on Friday, could offer further clues on the strength of domestic activity. Economists forecast a 21,100 jobs gain.
The price of oil, one of Canada's major exports, edged lower on signs of profit-taking after a rally in July. U.S. crude oil futures were down 0.3% at $81.57 a barrel.
Canadian government bond yields climbed across the curve, tracking moves in U.S. Treasuries. The 10-year was up 10.7 basis points at 3.609%.
