The Canadian dollar weakened against its US counterpart on Friday as the greenback rose broadly, but the loonie was on course for its best weekly performance in nearly three months. At 3:54 p.m. (1954 GMT), the Canadian dollar was trading 0.3 percent lower at 1.3037 to the greenback, or 76.70 US cents. The currency, which on Thursday touched its strongest in two weeks at 1.2976, traded in a range of 1.2984 to 1.3053.
"Generally firmer" US data and a lack of domestic impetus weighed on the loonie, said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets. The US dollar rose against a basket of currencies, rebounding from a near 1-1/2-month low, as upbeat US economic data and higher Treasury yields rekindled some investor appetite for the greenback.
The decline for the loonie came as US President Donald Trump instructed aides to proceed with tariffs on about $200 billion of Chinese products.
Speculators have raised bearish bets on the Canadian dollar, data from the US Commodity Futures Trading Commission and Reuters calculations showed. As of Sept. 11, net short positions had increased to 26,942 contracts from 26,307 a week earlier.
Canadian government bond prices fell across much of a steeper yield curve in sympathy with US Treasuries. The 10-year fell 13 Canadian cents to yield 2.343 percent.
The 10-year yield touched its highest intraday since Aug. 8 at 2.365 percent. Canada exports many commodities and runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows.
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