The Canadian dollar weakened slightly against its U.S. counterpart on Monday as lower oil prices offset strong trade data and investors weighed the G20's decision to avoid endorsing open trade.
Financial leaders of the world's biggest economies acquiesced to an increasingly protectionist United States on the weekend by dropping the pledge to keep global trade free and open.
"The market is clearly not interested in that type of rhetoric, it's actually looking for something concrete to trade," said Brad Schruder, director of corporate sales and structuring at Bank of Montreal.
The Canadian dollar settled at $1.3354 to the greenback, or 74.88 cents US, slightly weaker than Friday's close of $1.3337, or 74.98 cents US. The currency traded in a range of $1.3304 to $1.3373.
Schruder said the Canadian currency will likely track crude oil prices more closely since the Federal Reserve's monetary policy outlook is priced in and details on the tax plans of U.S. President Donald Trump are likely several months away. Prices of oil, one of Canada's major exports, fell on concerns that growing U.S. crude output could hamper an Organization of the Petroleum Exporting Countries-led production cut deal.
U.S. crude prices settled down 56 cents US at US$48.22 a barrel, while the Brent global benchmark was off 10 cents US at US$51.66.
Canadian wholesale trade unexpectedly soared by 3.3 per cent in January on stronger sales of motor vehicles and parts, Statistics Canada data showed. In volume terms, wholesale trade grew by 3.4 per cent, which is likely to bolster overall economic growth for the month.
The loonie rose 0.9 per cent last week, helped by stronger-than-expected domestic manufacturing data and the prospect of Fed interest rate hikes proceeding at only a gradual pace.
Speculators cut bullish bets on the Canadian dollar for the second straight week, data from the Commodity Futures Trading Commission and Reuters calculations showed on Friday.
Canadian government bond prices rose across the yield curve, with the two-year up 2.5 cents to yield 0.792 per cent and the 10-year rising 28 cents to yield 1.727 per cent. The yields on both the two-year and 10-year issues were their lowest since March 7.
Domestic retail sales data for January is due on Tuesday and the Canadian government will release its federal budget on Wednesday.