(Adds strategist quote and details throughout, updates prices) * Canadian dollar weakens 0.2% against the greenback * Canadian average weekly earnings increase 3.4% year-over-year * Oil prices gain 0.3% * Bond prices move lower across the yield curve By Levent Uslu TORONTO, July 25 (Reuters) - The Canadian dollar weakened to a near one-month low against the greenback on Thursday as interest rate differentials moved further in favor of the U.S. currency. At 3:49 p.m. EDT (1949 GMT), the Canadian dollar was trading 0.2% lower at 1.3161 to the greenback, or 75.98 U.S. cents. The currency notched its weakest intraday level since July 26 at 1.3167. "It's not too surprising for the Canadian dollar to lose some ground given that we are seeing some widening out in the interest rate differentials between the U.S. and Canada," said Shaun Osborne, chief currency strategist at Scotiabank. Canada's 2-year yield touched its lowest intraday level since June 26 at 1.397%, while the gap between the 2-year yield and its U.S. counterpart widened by 1.3 basis points to a spread of 41.1 basis points in favor of the U.S. bond, the biggest gap since June 18. The wider yield spread comes following data since Friday showing weaker-than-expected retail sales and wholesale trade data for May. The loonie lost ground despite a higher price for oil, one of Canada's major exports. U.S. crude oil futures settled up 0.3% at $56.02 a barrel, supported by rising tensions between the West and Iran and a big decline in U.S. crude stockpiles, but gains were capped due to lingering worries about slowing economic growth that could reduce fuel demand. Meanwhile, data from Statistics Canada showed that average weekly earnings of nonfarm payroll employees were up 3.4% from the previous year, the highest year-over-year growth rate since February 2018. The upward move in weekly earnings was accompanied by an increase of 32,600 in the number of nonfarm payroll employees. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries and German Bunds after European Central Bank President Mario Draghi said the bank sees a low risk of a recession in the euro zone. The 2-year fell 3 Canadian cents to yield 1.443% and the 10-year was down 19 Canadian cents to yield 1.464%. (Reporting by Levent Uslu; editing by Jonathan Oatis)
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