Canadian wholesale trade decreased by 1.8pc from April on weaker sales in the motor vehicle and motor vehicle parts and accessories subsector as well as the miscellaneous subsector, Statistics Canada said. Analysts had forecast a 0.5pc increase.

It was the second domestic economic report in as many trading days that was weaker than expected. On Friday, data showed a surprise decline in May retail sales.

Nonetheless, Canada's economy has showed signs of picking up in the second quarter after a slowdown at the turn of the year, even as a more uncertain outlook for trade has weighed on the global economy.

At 9:26 a.m. (1326 GMT), the Canadian dollar was trading 0.1pc lower at 1.3083 to the greenback, or 76.44 US cents. The currency, which on Friday notched its strongest intraday level since Oct. 25 at 1.3016, traded in a range of 1.3041 to 1.3095.

Foreign exchange investors were waiting to see by how much and how fast policymakers might ease policy, beginning with the European Central Bank on Thursday.

Earlier this month, the Bank of Canada made clear it had no intention of easing monetary policy as it left its benchmark interest rate on hold at 1.75pc.

Speculators have raised bullish bets on the currency to the highest since March 2018, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday.

As of July 16, net long positions in the loonie rose to 20,964 contracts from 9,226 contracts in the prior week.

Meanwhile, the price of oil, one of Canada's major exports was supported on Monday by concerns that Iran's seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf. US crude oil futures were up 0.5pc at $55.90 a barrel.

The gap between Canada's 2-year yield and its US counterpart widened by 2.2 basis points to a spread of 37.5 basis points in favor of the US bond, its biggest gap since June 18.