TORONTO: The Canadian dollar weakened to its lowest level in eight months against the greenback on Friday and was on track for its biggest weakly decline since March 2020 as the prospect of a slowing global economic recovery weighed on investor sentiment.

Global shares fell for a fifth straight day and the US dollar remained firm in a flight to safety as rising coronavirus cases compounded concerns over Chinese growth and the outlook for US stimulus.

Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global economic outlook.US crude oil futures fell for a seventh day, down 1.9% at $62.50 a barrel, while the Canadian dollar weakened 0.6% to 1.2902 per greenback, or 77.51 US cents.

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The currency touched its weakest intraday level since last December at 1.2948. For the week, it was on track to fall 3%.

Domestic data showed that retail sales jumped by 4.2% in June from May but a preliminary estimate for July was less promising, with sales falling 1.7%.

"Unfortunately, with (coronavirus) case counts rising in recent weeks, the outlook for retail is getting cloudier," Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said in a note.

Meanwhile, the United States extended the closure of its land borders with Canada and Mexico to non-essential travel such as tourism through Sept. 21 despite Ottawa's decision to open its border to vaccinated Americans.

Canada's house prices will come off the boil next year, rising only modestly after a mini-boom in the middle of the pandemic, according to a Reuters poll of property market analysts who still expect affordability to worsen in the coming years.

Canadian government bond yields edged lower across the curve, with the 10-year down about half a basis point at 1.122%.