Canada's employment report for May, due at 8:30 a.m. EDT, can help guide expectations for another Bank of Canada interest rate hike as soon as next month.

Money markets see about a 70 percent chance of a rate increase in July by the central bank, which has raised the rate three times since last summer.

The Group of Seven meeting of rich nations is almost certain to be marked by the clash of a combative US President Donald Trump and other leaders on Friday when they pressure him to lift sanctions on steel and aluminum they fear could lead to a trade war.

Stocks and other risk-sensitive assets, including the commodity-linked Canadian dollar, lost ground ahead of the meeting.

At 7:53 a.m. EDT (1153 GMT), the Canadian dollar was trading 0.2 percent lower at C$1.2994 to the greenback, or 76.96 US cents. The currency traded in a range of C$1.2970 to C$1.3029.

The price of oil, one of Canada's major exports, fell as weakening demand in China and surging US output weighed on markets. US crude prices were down 0.6 percent at $65.59 a barel.

The Conservatives, led by populist Doug Ford, are on track for a sweeping victory in Canada's most populous province, Canadian networks projected on Thursday, as Ford declared the province is "open for business."

The yield on Ontario's 10-year bond was 1.1 basis point lower at 2.938 percent, while the gap between it and the yield on the equivalent maturity Quebec bond was little changed at about 5.5 basis points.

Canadian government bond prices were higher across the yield curve, with the two-year up 2 Canadian cents to yield 1.901 percent and the 10-year rising 10 Canadian cents to yield 2.273 percent.