At 4:16 p.m. (2016 GMT), the Canadian dollar was trading 0.1pc higher at 1.3062 to the greenback, or 76.56 US cents.

The currency, which last Thursday notched an eight-month high at 1.3038, traded in a range of 1.3042 to 1.3080.

The outlook for the US dollar remained grim after Federal Reserve Chair Jerome Powell's bleak comments on the US economy, which bolstered expectations of an interest rate cut later this month.

In contrast, the Bank of Canada made clear on Wednesday it had no intention of easing monetary policy even as it highlighted the risks that trade wars posed to the global economy.

"If you look at the relative monetary policy, Canada versus the US, it still looks like divergence," said Erik Bregar, head of FX strategy at the Exchange Bank of Canada.

Chances of an interest rate cut this year by the Bank of Canada were less than 35pc, data from the overnight index swaps market showed. Over the same period, the market expects at least two rate cuts from the Fed.

The price of oil, one of Canada's major exports, fell as OPEC forecast slower demand for its crude next year. US crude oil futures settled 0.4pc lower at $60.20 a barrel.

New home prices in Canada declined 0.1pc in May, after prices were flat for the previous three months, Statistics Canada said.

Canadian government bond prices were lower across a steeper yield curve in sympathy with US Treasuries, after data showed US underlying consumer prices increased by the most in nearly 1-1/2 years in June.

The two-year fell 3 Canadian cents to yield 1.602pc and the 10-year was down 35 Canadian cents to yield 1.623pc.