(Adds details on activity, updates prices) * Canadian dollar dips 0.2% against greenback * Touches weakest level since Aug. 23 at 1.2761 * Bank of Canada leaves key interest rate unchanged at 0.25% * Canadian bond yields ease across the curve By Fergal Smith TORONTO, Sept 8 (Reuters) - The Canadian dollar fell to its weakest level in more than two weeks against the greenback on Wednesday, as investors worried that the global economic outlook is deteriorating even as the Bank of Canada looked past a soft patch in the domestic economy. Wall Street dipped on concerns that the spread of the Delta variant of the coronavirus could slow economic recovery, while the safe-haven U.S. dollar gained ground against a basket of major currencies. "Growth forecasts globally are being revised lower while at the same time inflation is now expected to potentially settle at a higher level," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets. "That"s a challenging backdrop for risk assets and also for cyclical currencies, including the Canadian dollar." The loonie was trading 0.2% lower at 1.2675 to the greenback, or 78.90 U.S. cents, after touching its weakest intraday level since Aug. 23 at 1.2761. "It"s really driven by what we are seeing with respect to the U.S. dollar and macro factors predominantly as opposed to anything with respect to the Bank of Canada or the upcoming election," Rai said. The Bank of Canada left its key interest rate unchanged at a record low 0.25%, as expected. It sees the economy strengthening in the second half of 2021 after shrinking in the second quarter, although a fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery. Canadians go to the polls on Sept. 20 in an election that Prime Minister Justin Trudeau called two years early, seeking to turn public approval for his handling of the COVID-19 pandemic into a new, four-year mandate. Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries. The 10-year eased 2.9 basis points to 1.198%. (Reporting by Fergal Smith; Editing by Bernadette Baum and Peter Cooney) Our Standards: The Thomson Reuters Trust Principles.