The Canadian dollar edged lower against its U.S. counterpart on Wednesday, as investors continued to take profit after recent gains even as the greenback broadly fell and oil prices rose.
At 9:33 a.m. EST, the Canadian dollar was trading at $1.2488 to the greenback, or 80.08 U.S. cents, down 0.2 per cent. The currency traded in a range of $1.2428 to $1.2494.
The loonie has retreated after hitting its strongest in three months on Friday at $1.2355 as investors await a Bank of Canada interest rate decision next week.
Stronger-than-expected domestic jobs data on Friday and a business survey on Monday that showed optimism have helped lift the chances of a rate hike on Jan. 17 to about 80 per cent.
Losses for the loonie come amid increased worries that the North American Free Trade Agreement could be scrapped.
Canada sends about 75 per cent of its exports to the United States.
The price of oil, one of Canada's major exports, reached new multi-year highs as OPEC-led production cuts and healthy demand helped balance the market. U.S. crude prices were up 0.7 per cent at $63.38 a barrel.
The U.S. dollar slumped after a report that China was ready to slow or halt its U.S. Treasury purchases, with the greenback posting its biggest single-day drop against the Japanese yen in nearly eight months.
The value of Canadian building permits fell by 7.7 per cent in November from October, Statistics Canada said. Analysts surveyed by Reuters had expected a decrease of 0.3 per cent.
Canadian government bond prices were lower across much of a steeper yield curve in sympathy with U.S. Treasuries.
The 10-year, which fell 13 cents to yield 2.222 per cent, touched its highest intraday yield since September 2014 at 2.231 per cent.