CANADA FX DEBT-C$ hits 2-month low but claws back decline ahead of BoC rate decision

 (Adds strategist quotes and details throughout; updates prices)
    * Loonie touches its weakest since June 19 at 1.3382
    * Price of U.S. oil decreases 2.1%
    * Canadian manufacturing activity slows in August
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Sept 3 (Reuters) - The Canadian dollar was little
changed against the greenback on Tuesday, with the currency
recovering from a two-month low hit earlier in the day on global
economic worries as the focus shifted to this week's Bank of
Canada interest rate decision.
    At 2:38 p.m. (1838 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3325 to the greenback, or 75.05
U.S. cents. The currency, which fell last week for the seventh
straight week, touched its weakest intraday level since June 19
at 1.3382.
    "It is now in a nice holding pattern, waiting for the Bank
of Canada tomorrow," said Amo Sahota, director at Klarity FX in
San Francisco. "We think the Bank of Canada is going to signal
that they may join the chorus of other central banks looking at
lowering their interest rates."    
    Money markets expect the Bank of Canada to leave its
benchmark interest rate on hold at 1.75% on Wednesday but to
ease by the end of the year. The central bank has worried about
the risks trade wars pose to the global economy.           
    Data on Tuesday showed that Canadian manufacturing activity
slowed in August as new work received by firms slumped to the
lowest level in nearly four years, pressured by trade tensions
between the United States and China and global economic
    The U.S. dollar        climbed to its strongest level in
over two years against a basket of currencies as traders favored
the greenback on worries about U.S.-China trade tensions and a
chaotic British exit from the European Union.             
    But the greenback's initial gains abated in the wake of a
private report that showed the U.S. manufacturing sector
recorded its first monthly contraction since 2016 in August.
    The price of oil, one of Canada's major exports, fell after
manufacturing data raised concerns about a weakening global
economy, while the U.S.-China trade dispute continued to drag on
investor sentiment. U.S. crude oil futures        settled 2.1%
lower at $53.94 a barrel.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 4.5 Canadian cents to yield 1.329% and the 10-year
            was up 35 Canadian cents to yield 1.128%.
    Last month, the 10-year yield hit its lowest intraday level
since October 2016 at 1.083%.  

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter