TORONTO: The Canadian dollar weakened against its US counterpart on Tuesday as investors grew more worried about renewed coronavirus lockdowns slowing economic recovery, with the loonie pulling back from a near two-week high the day before.

A five-day charge by world stocks fizzled after pandemic lockdown measures were reimposed in Melbourne, Australia. It follows a surge in coronavirus cases in several US states, forcing some restaurants and bars to close again.

The price of oil, one of Canada's major exports, fell amid concerns that a surge in new cases will hamper any recovery in fuel demand. US crude prices were down 0.8% at $40.31 a barrel.

At 9:04 a.m. (1304 GMT), the Canadian dollar was trading 0.3% lower at 1.3570 to the greenback, or 73.69 US cents. The currency, which notched on Monday its strongest intraday level since June 23 at 1.3616, traded in a range of 1.3525 to 1.3588.

Speculators have cut their bearish bets on the Canadian dollar to the lowest since mid-March, data from the US Commodity Futures Trading Commission showed on Monday. As of June 30, net short positions had decreased to 20,519 contracts from 20,834 in the prior week.

Canadian Prime Minister Justin Trudeau will not visit Washington with Mexico's president this week to celebrate a new North American trade deal, his office said on Monday, after Canada raised concerns over potential US aluminum tariffs.

Canadian government bond yields were mixed across a steeper curve on Tuesday, with the 2-year down 2.5 basis points at 0.286%.

Canada's employment report for June is due on Friday, while Canadian Finance Minister Bill Morneau is due to present a fiscal snapshot on Wednesday.

Canada's parliamentary budget watchdog has projected that the budget deficit will soar to C$256 billion in the 2020-21 fiscal year from C$23.8 billion in 2019-210.