TORONTO: The Canadian dollar weakened to an eight-day low against the greenback as investors weighed prospects of US coronavirus relief and domestic data showed fading retail sales momentum, with traders booking some profit in the currency after a recent run higher.

The loonie was trading 0.5% lower at 1.2789 to the greenback, or 78.19 US cents, having hit its weakest intraday level since Dec. 10 at 1.2798.

On Tuesday, the loonie notched a 2-1/2-year high at 1.2684. The currency's subsequent pullback left it down 0.1% for the week, its first decline in five weeks.

The Canadian dollar's rally "is running out of puff here a little bit," said Shaun Osborne, chief currency strategist at Scotiabank. "It seems to me as if we are seeing a bit of year-end profit taking."

The US dollar consolidated losses after a week of declines that pushed it to its lowest in 2-1/2 years, while Wall Street retreated from record highs as a coronavirus relief package remained in focus ahead of a weekend deadline.

Canada sends about 75% of its exports to the United States, including oil, which settled 1.5% higher at $49.10 a barrel as investors focused on the rollout of COVID-19 vaccines and looked past rising case numbers and tighter lockdowns in Europe.

Canadian retail sales grew by 0.4% in October, surpassing estimates for a 0.2% increase, data from Statistics Canada showed. It was the sixth straight monthly gain, but a flash estimate showed that sales in November were relatively unchanged.

"Momentum in Canadian retail sales proved resilient in October, but that strength seems to have faded in November," Royce Mendes, a senior economist at CIBC Capital Markets, said in a note.

Canadian government bond yields were mixed across a flatter curve, with the 10-year nearly unchanged at 0.741%.