The Canadian dollar weakened against its US counterpart on Monday, reversing some of last week's rally, as oil prices fell and the greenback broadly climbed. The US dollar snapped a two-week losing streak as Friday's strong US jobs data fueled demand just days after the Federal Reserve expressed caution about further interest rate hikes this year.
The price of oil, one of Canada's major exports, pulled back from an earlier two-month high as forecasts of weaker demand and an economic slowdown offset Opec-led supply cuts and US sanctions against Venezuela's petroleum industry.
US crude prices were down 2 percent at $54.14 a barrel.
At 9:13 am (1413 GMT), the Canadian dollar was trading 0.3 percent lower at 1.3134 to the greenback, or 76.14 US cents. The currency, which on Friday touched its strongest intraday in nearly three months at 1.3069, traded in a range of 1.3086 to 1.3138.
The loonie rose 0.9 percent last week as hopes of progress on trade talks between the United States and China offset data showing that Canada's economy contracted in November. Canada's jobs report for January is due on Friday.
Data last Friday from the US Commodity Futures Trading Commission, which had been delayed during a partial shutdown of the US government, and Reuters calculations showed that speculators raised their bearish bets on the Canadian dollar in December to the highest in about five months.
As of Dec. 24, net short positions had jumped to 44,692 contracts from 7,457 a week earlier.
Canadian government bond prices were lower across the yield curve on Monday in sympathy with US Treasuries. The 10-year declined 5 Canadian cents to yield 1.964 percent.
The gap between Canada's 2- and 10-year yields grew by 0.4 basis points to a spread of 12.7 basis points, its widest since Nov. 21.