TORONTO: The Canadian dollar weakened against its US counterpart on Monday, pulling back from Friday's three-month high ahead of a business survey that could guide bets on next week's interest rate decision by the Bank of Canada.
The likelihood of a rate hike on Jan. 17 has jumped to nearly 80 percent after data on Friday showed the economy added almost 80,000 jobs in December for the second month in a row.
The Bank of Canada will release its business outlook report, which is based on a survey of about 100 companies, at 10:30 a.m. EST (1530 GMT). Analysts will look to see whether companies were feeling more upbeat in the fourth quarter.
The US dollar
climbed against a basket of major currencies as investors in the euro took profits after a recent rally.
At 9:56 a.m. EST (1456 GMT), the Canadian dollar was down 0.2 percent at C$1.2434 to the greenback, or 80.42 US cents. The currency traded in a range of C$1.2378 to C$1.2437.
On Friday, the loonie touched its strongest since Sept. 27 at C$1.2355.
Still, speculators have cut bullish bets on the Canadian dollar to their lowest since July, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 2, net long positions had fallen to 14,739 contracts from 17,346 a week earlier.
Prices of oil, one of Canada's major exports, edged higher on a slight decline in the number of US rigs drilling for new production and the Organization of the Petroleum Exporting Countries' sustained output cuts.
US crude prices were up 0.10 percent at $61.50 a barrel.
Canadian government bond prices were lower across the yield curve, with the two-year down 1 Canadian cent to yield 1.781 percent and the 10-yearfalling 8 Canadian cents to yield 2.164 percent.
On Friday, the two-year yield reached its highest intraday since June 2011 at 1.786 percent.
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