TORONTO: The Canadian dollar edged lower against its US counterpart on Monday as oil prices seesawed and investor attention turned to central bank meetings in the United States and Japan this week.
Stronger-than-expected retail sales data on Friday had helped the loonie rack up last week its fourth week of gains in a row.
The currency has rallied 16 percent since falling to a 12-year low in January, helped by a smaller gap between Canadian and US bond yields and a rebound in oil prices since February.
However, oil prices seesawed as traders took profits before the central bank meetings in the United States and Japan. US crude prices were last down 0.14 percent to $43.67 a barrel.
Federal Reserve policymakers are expected to hold interest rates steady at Wednesday's announcement, but may tweak their description of the economic outlook to leave the path open for future rate rises.
At 9:18 a.m. EDT (1318 GMT), the Canadian dollar was trading at C$1.2690 to the greenback, or 78.80 US cents, weaker than Friday's close of C$1.2671, or 78.92 US cents.
The currency's strongest level of the session was C$1.2653, while its weakest was C$1.2717. Last week the loonie touched its strongest since July 6 at C$1.2593.
Speculators have increased bullish bets on the loonie, Commodity Futures Trading Commission data showed on Friday. Net long Canadian dollar positions rose to 7,308 contracts in the week ended April 19 from 2,385 contracts in the prior week.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 1.5 Canadian cents to yield 0.686 percent and the benchmark 10-year falling 45 Canadian cents to yield 1.543 percent.
The 10-year yield touched its highest since Dec. 9 at 1.554 percent, while the Canada-US 10-year spread was 4.8 basis points less negative at -34.5 basis points. That was the smallest gap since Jan. 20, the day the Bank of Canada surprised many traders by not cutting its policy rate.
Bank of Canada Governor Stephen Poloz will gives a speech to the Investment Industry Association of Canada and Securities Industry and Financial Markets Association in New York on Tuesday, while Canada's gross domestic product data for February is due at the end of the week.
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