The Canadian dollar weakened against its US counterpart on Monday, although losses were pared after crude oil prices turned higher, while domestic attention turned to Tuesday's federal budget. The currency had touched a nearly five-month high on Friday at C$1.2924 after strength in retail sales bolstered expectations first-quarter growth will surpass the Bank of Canada's 1 percent forecast.
However, it is overbought and "long overdue for consolidation," according to a research note Monday morning from Bipan Rai, executive director, macro strategy CIBC Capital Markets. Oil prices recovered from early losses as the market digested news of a modest rise in US drilling activity, though uncertainty lingered over the outcome of a meeting of the world's major exporters next month to discuss freezing output. US crude prices were up 0.46 percent to $39.62 a barrel.
At 9:19 am EDT (1319 GMT), the Canadian dollar was trading at C$1.3050 to the greenback, or 76.63 US cents, weaker than Friday's official close of C$1.3037, or 76.70 US cents. The currency's strongest level of the session was C$1.2995, while its weakest was C$1.3093.
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