TORONTO: The Canadian dollar weakened on Monday against its US counterpart as oil prices dipped and the greenback posted broader gains, but the loonie was on track to advance for the third straight month.
The currency has rallied more than 10 percent since early May, including 4 percent this month, as the Bank of Canada raised interest rates for the first time in nearly seven years.
Data on Friday showing robust growth in the domestic economy in May has supported expectations that the central bank will hike again in the coming months.
US crude prices were down 0.38 percent at $49.52 a barrel. Prices had hit an earlier 2-month high, boosted by news of a producers' technical meeting next week.
The US dollar edged higher against a basket of major currencies after euro zone inflation data helped cool expectations of a rapid withdrawal of policy stimulus by the European Central Bank in the coming months.
At 9:32 a.m. ET (1332 GMT), the Canadian dollar was trading at C$1.2472 to the greenback, or 80.18 US cents, down 0.3 percent.
The currency traded in a range of C$1.2433 to C$1.2490. On Thursday, it touched its strongest in more than two years at C$1.2414.
Speculators have increased bullish bets on the loonie, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday. Canadian dollar net long positions rose to 26,613 contracts as of July 25 from 8,043 contracts a week earlier.
Canadian government bond prices were mixed across a steeper yield curve, with the two-year price up 0.5 Canadian cent to yield 1.325 percent and the 10-year falling 23 Canadian cents to yield 2.056 percent.
The 10-year yield touched its highest since November 2014 at 2.065 percent.
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