TORONTO: The Canadian dollar weakened against its U.S. counterpart on Monday, pulling back from its strongest level in over two months, as investors turned cautious ahead of interest rate decisions by some major central banks this week.

Stock markets worldwide halted their January rally and the price of oil, one of Canada’s major exports, was down 1.5% at $78.50 a barrel.

Investors expect the Federal Reserve will raise rates by 25 basis points on Wednesday, followed the day after by half-point hikes from the Bank of England and European Central Bank.

The Canadian dollar was trading 0.2% lower at 1.3342 to the greenback, or 74.95 U.S. cents, after touching its strongest since Nov. 16 at 1.3297.

Still, speculators have raised their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Jan. 24, net short positions had increased to 30,712 contracts from 27,259 in the prior week.

Canadian GDP data, due on Tuesday, is expected to show the economy expanded by 0.1% in November.

Last Wednesday, the Bank of Canada signaled a pause in its tightening campaign to assess how effective interest rate hikes had been in dampening excess demand. The central bank has raised its benchmark rate to a 15-year high of 4.5%.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.

The 10-year touched its highest since Jan. 12 at 2.949% before dipping to 2.932%, up 4.6 basis points on the day.