TORONTO: The Canadian dollar weakened against the greenback on Monday, underperforming most other G10 currencies as oil prices fell and market players looked for a widening gap between US and Canadian interest rates over the coming year.

The Federal Reserve is widely expected to raise interest rates on Wednesday despite US President Donald Trump and his top trade adviser ratcheting up their criticism of the central bank's monetary tightening.

"It is much more a rate story right now," said Scott Lampard, head of global markets, at HSBC Bank Canada. "The expectation is that the Bank of Canada is probably going to be a little bit less hawkish than the Fed."

Investors have slashed bets on additional tightening from the Bank of Canada following a dovish interest rate announcement from the central bank earlier this month.

The Bank of Canada has hiked its benchmark rate five times since July 2017 to leave it at 1.75 percent. Money markets expect just 25 basis points of further tightening next year, which would leave the policy rate falling short of the central bank's neutral rate estimate of between 2.5 percent and 3.5 percent.

The neutral rate is seen as the rate at which monetary is neither boosting nor restraining growth.

At 4:07 p.m. (2107 GMT), the Canadian dollar was trading 0.2 percent lower at 1.3410 to the greenback, or 74.57 US cents. The loonie, which traded in a range of 1.3373 to 1.3421, was the only G10 currency other than the Norwegian krone to decline.

Last week, the loonie fell 0.4 percent. It was the fourth straight week that the currency was down.

Losses for the loonie came as worries about slower global growth pressured stocks and the price of oil, one of Canada's major exports. US crude oil futures settled 2.6 percent lower at $49.88 a barrel.

Adding to the currency's headwinds, the Canadian Real Estate Association said that home sales fell 2.3 percent in November from October, extending recent weakness.

In separate data, foreign investors bought a net C$3.98 billion in Canadian securities in October, mainly in bonds, Statistics Canada said.

Canadian government bond prices were higher across the yield curve, with the 10-year rising 41 Canadian cents to yield 2.053 percent.

The gap between Canada's 10-year yield and its US equivalent widened by 1.4 basis points to a spread of 80.2 basis points, its widest since May 2017.