* C$ falls to C$0.9639 to U.S. dollar, or $1.0376
* Worried investors shift buying to greenback
* Bond prices pause after big gains
By Andrea Hopkins
TORONTO, Aug 3 (Reuters) - The Canadian dollar fell to a three-week low on Wednesday as sliding North American stock markets and worries about slowing global growth drove investors to the more liquid U.S. dollar.
North American stocks had a rocky day. Another round of soft U.S. economic data sent the S&P 500 .SPX to a new low for the year, while Toronto stocks hit their weakest level in eight months. [.N] [.TO]
"The underlying softness in equities is probably going to keep the Canadian dollar more generally on the defensive," said Shaun Osborne, chief currency strategist at TD Securities.
"We don't have any data out in Canada for the next day or two, until the employment data on Friday, so ... we're just looking at chasing headlines and equity markets for direction."
At 12:01 p.m. (1401 GMT), the Canadian currency CAD=D4 was at $0.9639 to the U.S. dollar, or $1.0376, just above a session low of C$0.9648. That was the Canadian dollar's lowest point since July 13 and below Tuesday's North American close of C$0.9602, or $1.0414.
Investors sought safe-havens like gold and the U.S. dollar, highly liquid markets, as U.S. economic data once again came in below expectations. The U.S. services sector fell in July to its lowest level since February 2010, while new U.S. factory orders fell in June, pulled down by weak demand for transportation equipment. [ID:nN1E77208M]
The price of oil, a key Canadian export, was also on the decline after ratings agency Moody's assigned a negative outlook to the United States, inflaming worries of falling demand as the world's top oil user. [O/R]
The U.S. congressional passage of a deal this week saving the United States from default triggered fleeting relief. Investors focused on the longer-term challenges for the world's largest economy and the euro zone's troubles.
The United States is Canada's largest trading partner.
"In an environment where the U.S. is clearly struggling, the economic outlook is quite negative for Canada as well," Osborne said.
Canadian government bond prices were little changed across the curve, taking a breather after big gains in the previous session.
The pattern was similar to price movements in the market's U.S. counterpart, which also paused after hefty gains. But the bleak economic outlook is expected to continue to support both markets. [US/]
The two-year Canadian government bond CA2YT=RR rose 3 Canadian cents to yield 1.239 percent, while the 10-year bond CA10YT=RR fell 3 Canadian cents to yield 2.634 percent. The 30-year bond CA30YT=RR was up 20 Canadian cents to yield 3.157 percent. (Editing by Jeffrey Hodgson)