TORONTO: The Canadian dollar edged lower against its US counterpart on Monday as the default of a US hedge fund weighed on investor sentiment, offsetting higher oil prices.

US stock index futures dropped after Wall Street's surge in the prior session as major lenders came under pressure on concerns over possible spillover effects after the hedge fund default.

Oil, one of Canada's major exports, rose on expectations the OPEC+ group of leading producers will keep output unchanged in May, and worries that operations in the Suez Canal might take weeks to return to normal even though a ship blocking it has been partly refloated.

US crude prices were up 0.3% at $61.12 a barrel, while the Canadian dollar was trading 0.1% lower at 1.2592 to the greenback, or 79.42 US cents.

The currency traded in a range of 1.2571 to 1.2626. Last Thursday, it touched a two-week low at 1.2628.

Speculators have reduced their bullish bets on the Canadian dollar to the lowest this year, data from the US Commodity Futures Trading Commission showed. As of March 23, net long positions had decreased to 5,103 contracts from 10,263 in the prior week.

COVID-19 variant cases are increasing rapidly in several parts of Canada and longer-range forecasts show that stronger public health restrictions will be required to counter the spread of the disease, health officials said on Friday.

Canada's GDP data for January, due on Wednesday, could guide expectations on the Bank of Canada policy outlook. Strategists say the central bank could reduce its bond purchases in April.

Canadian government bond yields were lower across a flatter curve in tandem with US Treasuries on Monday. The 10-year fell 3.3 basis points to 1.468%, having pulled back from a 14-month high earlier this month at 1.677%.