The Canadian dollar edged lower against its US counterpart on Monday as oil prices fell, ahead of a meeting between Canadian Prime Minister Justin Trudeau and US President Donald Trump. Trudeau will look to nurture economic ties and avoid tensions over issues such as immigration on which the two leaders are sharply at odds. Canada may have most to lose if a proposed renegotiations of the North American Free Trade Agreement weakens trade between the two countries.
At 9:22 am ET (1422 GMT), the Canadian dollar was trading at C$1.3101 to the greenback, or 76.33 US cents, slightly weaker than Friday's close of C$1.3085, or 76.42 US. The currency's strongest level of the session was C$1.3073, while its weakest was C$1.3121.
The loonie weakened 0.4 percent last week after having posted a recent four-month high of C$1.2969. Some of last week's losses were pared after data on Friday showed a surge in domestic jobs.
Spending by Americans affects one-fifth of Canada's economy, while spending by Canadians affects less than three percent of US gross domestic product, said BMO Capital Markets in a research note. The US dollar rose against a basket of major currencies as investors focused again on the US reflation trade and braced for testimony by Federal Reserve chief Janet Yellen this week.
US crude prices were down 1.39 percent at $53.11 a barrel in response to growing evidence that US production is rising. Oil is one of Canada's major exports. Canadian government bond prices were lower across the yield curve in sympathy with US Treasuries ahead of Yellen's testimony. The two-year dipped 1.5 Canadian cents to yield 0.778 percent and the benchmark 10-year declined 19 Canadian cents to yield 1.719 percent.
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