* Canadian dollar falls 0.3 percent vs greenback
* Loonie touches C$1.3083, its weakest level since Sept. 11
* Price of U.S. oil rises 0.5 percent
* Canadian bond prices edge lower across much of yield curve
By Fergal Smith
TORONTO, Sept 27 (Reuters) - The Canadian dollar fell to a two-week low against an advancing greenback on Thursday, after criticism of Canada's negotiating position on NAFTA by U.S. President Donald Trump lowered expectations for a trade deal by a Sunday deadline.
Trump on Wednesday blasted Canada over the slow pace of talks to revamp the North American Free Trade Agreement, known as NAFTA. But Canada's Prime Minister Justin Trudeau dismissed the criticism, saying Canadians were tough negotiators. have priced in a lower probability of a NAFTA deal this weekend," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "That pushed us through $1.3050 and it snowballed from there."
Canada sends about 75 percent of its exports to the United States, so its economy could be hurt if a deal is not reached or if Trump follows through on a threat to impose tariffs on Canadian autos.
At 11:04 a.m. EDT (1504 GMT), the Canadian dollar CAD=D4 was trading 0.3 percent lower at 1.3062 to the greenback, or 76.56 U.S. cents. It touched its weakest level since Sept. 11 at $1.3083.
"I still think there is a reasonable probability of a deal this weekend," Anderson said. "It always gets the most intense right at the end on any type of negotiation because people actually have to move red lines."
Trump has already concluded a text with Mexico, the third country in NAFTA, and is threatening to leave out Canada unless it signs up by the end of the month.
The U.S. dollar .DXY climbed against a basket of six major currencies one day after the U.S. Federal Reserve raised interest rates for the third time this year. Bank of Canada has also been hiking rates this year. BoC Governor Stephen Poloz could provide clues on prospects of another hike in October when he speaks later today. The central bank will release his prepared remarks at 5:45 p.m. EDT.
The price of oil, one of Canada's major exports, was supported by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force. crude CLc1 prices were up 0.5 percent at $71.90 a barrel. O/R
Canadian government bond prices edged lower across much of the yield curve, with the 10-year CA10YT=RR falling 3 Canadian cents to yield 2.42 percent. On Tuesday, the 10-year yield touched its highest in over four months at 2.472 percent.