TORONTO: The Canadian dollar weakened against its US counterpart on Tuesday as the greenback made broad-based gains, although losses for the loonie were restrained as oil rose to a nearly 3-month high.
US crude prices were up 0.29 percent at $48.95 a barrel despite news that Iran and Libya have continued to increase production. Gains for oil follow an agreement last week by the Organization of Petroleum Exporting Countries to freeze output levels in a bid to stem a two-year price rout.
The US dollar rose against a basket of major currencies as investors raised bets on a Federal Reserve interest rate hike by the end of the year.
At 9:38 a.m. EDT (1338 GMT), the Canadian dollar was trading at C$1.3143 to the greenback, or 76.09 US cents, weaker than Monday's close of $1.3110, or 76.28 US cents.
The currency's strongest level of the session was C$1.3114, while its weakest was C$1.3174.
Total Canadian auto sales were down 0.5 percent versus the prior month, with a sharp fall in passenger car sales offset by more light truck sales, industry analyst Dennis DesRosiers wrote on Monday.
Canadian government bond prices were mixed across the yield curve, with the two-year up 0.5 Canadian cent to yield 0.536 percent and the benchmark 10-year falling 5 Canadian cents to yield 1.021 percent.
Earlier on Tuesday, the 10-year yield touched its highest in more than one week at 1.068 percent.
Canada's international merchandise trade report for August is due on Wednesday. Investors will be looking to see if exports were as strong as in the previous month. The September employment report is due on Friday.
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