* C$ at C$1.0042 vs US$, or 99.58 U.S. cents
* Earlier, C$ touches C$1.0003 or 99.97 U.S. cents
* Bond prices slip across the curve
By Jennifer Kwan
TORONTO, Aug 1 (Reuters) - The Canadian dollar fell to its
lowest level of the session against its U.S. counterpart on
Wednesday after the U.S. Federal Reserve said the economy was
weaker but left policy on hold.
The central bank stopped short of offering new monetary
stimulus even as it signaled further bond buys could be in
store, sending risk assets lower.
"The results will disappoint some in the equity markets that
had pinned their hopes on new measures today. Bearish for
equities and other risk assets as a result," said Avery
Shenfeld, chief economist at CIBC World Markets.
At 2:30 p.m. (1830 GMT), the Canadian dollar was at
C$1.0042 against the greenback, or 99.58 U.S. cents, after
falling as low as C$1.0049. On Tuesday, the currency finished at
C$1.0029 against the greenback, or 99.71 U.S. cents.
The Fed's policy decision comes a day before a key meeting
of the European Central Bank. ECB President Mario Draghi
heightened speculation of further bank purchases of Italian and
Spanish bonds when he said last week that he would do "whatever
it takes to preserve the euro."
Still, the risk of disappointment is high and the euro could
sell off if the ECB does not deliver.
Elsewhere, investors were largely unmoved by economic data
that showed the U.S. private sector added 163,000 new jobs in
July, topping economists' expectations of 120,000 new jobs.
The report from payrolls processor ADP came two days ahead
of Friday's more important government monthly, non-farm payrolls
report.
Also on Wednesday, data pointed to a sluggish global
manufacturing picture. U.S. and euro zone factory activity
struggled again in July while Chinese manufacturing fell to an
eight-month low as economies around the world showed signs of
slowing.
Canada's RBC Purchasing Managers' Index posted its first
decline in six months.
Canadian bond prices were flat to lower across the curve
with the two-year bond off by 6 Canadian cents to
yield 1.106 percent, and the benchmark 10-year bond
down 53 Canadian cents to yield 1.732 percent.