* Canadian dollar declines 0.5 percent against the greenback
* Loonie touches its weakest since last Friday at 1.2938
* The Australian and New Zealand dollars also lose ground
* Canada's 10-year yield nears a five-year high at 2.584 percent
By Fergal Smith
TORONTO, Oct 4 (Reuters) - The Canadian dollar weakened against the greenback on Thursday, giving up the gains that followed a deal over the weekend to revamp the NAFTA trade pact, as lower oil and metal prices pressured the currencies of commodity producing countries.
The price of oil, one of Canada's major exports, fell as the prospect of increased crude production from Saudi Arabia and Russia prompted profit-taking the day after futures hit four-year highs. crude oil futures CLc1 settled 2.7 percent lower at $74.33 a barrel, while copper futures HGc1 declined 1.8 percent.
"It's really a commodities play," said Michael Goshko, corporate risk manager at Western Union Business Solutions.
The three worst performing G10 currencies were the commodity-linked Canadian, Australian and New Zealand dollars.
At 3:40 p.m. (1940 GMT), the Canadian dollar CAD=D4 was trading 0.5 percent lower at 1.2931 to the greenback, or 77.33 U.S. cents.
It touched its weakest level since last Friday at 1.2938, which was before a deal was clinched to salvage the North American Free Trade Agreement. On Monday, the loonie touched its strongest in more than four months at 1.2783.
Declines for commodity-linked currencies came as U.S. Treasury yield pushed to multi-year highs ahead of U.S. jobs data on Friday that could show the American economy growing at a robust pace.
Canada's jobs data is also due on Friday. Ivey Purchasing Managers Index data released on Thursday showed that purchasing activity in Canada expanded in September at its slowest pace in more than two years as a measure of employment tumbled. have got huge numbers tomorrow both north and south of the border," Goshko said. "So we could be looking at an entirely different picture in the morning."
The Canadian dollar will rally over the coming year, according to currency strategists in a Reuters poll who raised their forecasts for the currency as the deal to salvage NAFTA reduced economic uncertainty. government bond prices were mixed across a steeper yield curve, with the two-year CA2YT=RR up 1.5 Canadian cents to yield 2.307 percent and the 10-year CA10YT=RR falling 1 Canadian cent to yield 2.553 percent.
The 10-year yield touched its highest intraday since January 2014 at 2.584 percent.