(Changes headline to correct spelling of "hits" and remove word "against")
* Canadian dollar falls 0.3% against the greenback
* Canada's GDP grows by 0.2% in May
* U.S. oil prices increase by 1%
* Bond prices trade mixed across a flatter yield curve
By Levent Uslu
TORONTO, July 31 (Reuters) - The Canadian dollar weakened to a more-than five-week low against the greenback on Wednesday, as comments by the Federal Reserve that were seen by some investors as hawkish offset domestic data showing stronger-than-expected economic growth.
The U.S. dollar .DXY gained against a basket of currencies after the Fed cut interest rates by 25 basis points as expected, its first ease in more than a decade.
Although rate cuts are intended to weaken the currency, the greenback jumped as Fed Chair Jerome Powell during the subsequent news conference called the cut a mid-cycle policy adjustment, as opposed to the start of a rate-cutting cycle. has to be said that the market is viewing this as pretty hawkish ... so it's no surprise that dollar-CAD is heading a bit higher," said Christian Lawrence, a senior market strategist at Rabobank.
The downward move in the loonie came despite data showing the Canadian economy grew 0.2% in May, beating estimates for 0.1% growth, thanks to a rebound in manufacturing. the high debt loads and depleted savings of Canadians look set to crimp their spending for as long as decades, economists say, with consumers already scaling back after borrowing costs began to rise in 2017. 4:01 p.m. (2001 GMT), the Canadian dollar CAD=D4 was trading 0.3% lower at 1.3196 to the greenback, or 75.78 U.S. cents. The currency hit its lowest intraday level since June 24 at 1.3214.
Meanwhile, the price of oil, one of Canada's major exports, rose for a fifth day following a larger-than-expected drop in U.S. inventories and after the Fed cut interest rates. U.S. crude oil futures CLc1 settled 1% higher at $58.58 a barrel.
Canadian government bond prices were mixed across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 4.5 Canadian cents to yield 1.556% and the 10-year CA10YT=RR was up 7 Canadian cents to yield 1.486%.