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* C$ at C$1.0330 vs US$, or 96.81 U.S. cents * U.S. gov't shutdown in 4th day, raises debt ceiling concerns * Bond prices lower across curve By Leah Schnurr TORONTO, Oct 4 (Reuters) - The Canadian dollar weakened against the greenback on Friday as investors were becoming more anxious about the effects of the U.S. government shutdown, which entered its fourth day. A political impasse over the U.S. budget has shut down non-essential government services and appeared likely to drag on for another week or more. Analysts say the longer the shutdown continues, the more likely it is that negotiations between Democrats and Republicans will lead to a deal that would involve raising the debt ceiling. Investors are also concerned about what impact the standoff will have on a still-fragile economic recovery. Analysts said a shutdown that drags on longer than a few days will start to bite into economic growth in the United States, Canada's biggest trading partner. "The market is getting a wee bit more apprehensive as we draw closer to the all-important mid-October date for the debt ceiling," said Dean Popplewell, chief currency strategist at OANDA. "There's too much at stake here, not just for the United States but globally." U.S. lawmakers must raise the government's $16.7 trillion debt borrowing limit by mid-October, or the United States will be facing default. With the government shut down, the U.S. report on nonfarm payrolls report, one of the most important data releases for markets, was not issued on Friday as scheduled. At home, investors will get a reading on the pace of purchasing activity in Canada for September at 10 am ET (1400 GMT). The index is expected to rise modestly from the previous month. The Canadian dollar was at C$1.0330, or 96.81 U.S. cents, weaker than Thursday's close of C$1.0326, or 96.84 U.S. cents. Following a brief spike after the U.S. Federal Reserve's decision to stand pat on its economic stimulus program on Sept. 18, the Canadian dollar has been trading in a tight range. The government shutdown has also cast uncertainty on when the Fed may start to reduce its monetary stimulus, which currently stands at $85 billion a month. Analysts were speculating any fiscal drag on the economy could prevent the Fed from reducing those bond purchases as soon as had been expected. Prices for Canadian government bonds were lower across the maturity curve. The two-year bond slipped 3.3 Canadian cents to yield 1.197 percent, while the benchmark 10-year bond lost 22 Canadian cents to yield 2.570 percent.