* Canadian dollar dips 0.1% against the greenback * Canadian PMI rises to 50.6 in January * Price of U.S. oil decreases 1.1% * Canadian bond yields rise across steeper yield curve TORONTO, Feb 3 (Reuters) - The commodity-linked Canadian dollar fell to an eight-week low against its broadly stronger U.S. counterpart on Monday as oil prices fell and domestic data showed that factory activity increased at a sluggish pace in January. The price of oil, one of Canada's major exports, was dragged down by concern that the coronavirus outbreak could reduce demand, though the possibility of deeper output cuts by OPEC and its allies offered some price support. U.S. crude oil futures were down 1.1% at $50.99 a barrel. The U.S. dollar climbed against a basket of major currencies, with the greenback gaining more than 1% against the Chinese renminbi as Chinese markets took a beating in the first trading session after an extended Lunar New Year break. The IHS Markit Canada Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 50.6 in January from 50.4 in December. A reading above 50 shows expansion in the sector. At 9:42 a.m. (1442 GMT), the Canadian dollar was trading 0.1% lower at 1.3246 to the greenback, or 75.49 U.S. cents. The currency, which fell 1.9% in January, touched its weakest intraday level since Dec. 9 at 1.3255. Speculators have cut their bullish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 28, net long positions had fallen to 34,590 contracts from 38,294 in the prior week. Canada's trade data for December is due on Wednesday and January jobs data is due at the end of the week, both of which could help guide expectations for the Bank of Canada's policy outlook. Last month, the Canadian central bank left the door open to an interest rate cut should a recent slowdown in domestic growth persist. Money markets see about a 60% chance that it will ease by April. Canadian government bond yields prices were higher across a steeper yield curve, with the 10-year yield rising 2.2 basis points to 1.295%. On Friday, the 10-year yield touched its lowest intraday level since Oct. 8 at 1.257%. (Reporting by Fergal Smith Editing by Paul Simao)
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