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The Canadian dollar weakened against its U.S. counterpart on Monday, adding to its November decline as investors worried about a potential escalation of global trade conflicts and awaited a Bank of Canada interest rate decision this week.

Stock markets reversed earlier gains after U.S. President Donald Trump said he would restore tariffs on some imports from Brazil and Argentina, overshadowing data showing that the Chinese and euro zone economies were stabilizing.

The Bank of Canada, which is expected on Wednesday to leave its benchmark interest rate at 1.75 per cent, has expressed concern about global trade uncertainty.

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The loonie has been pressured since October by a more dovish stance from the central bank.

At 9:04 a.m., the Canadian dollar was trading 0.1 per cent lower at 1.3295 to the greenback, or 75.22 U.S. cents. The currency, which fell 0.9 per cent in November, traded in a range of 1.3275 to 1.3303.

The price of oil, one of Canada’s major exports, was supported by hints that OPEC and its allies may agree to deepen output cuts at a meeting this week and as rising manufacturing activity in China suggested stronger demand.

U.S. crude oil futures were up 1.8 per cent at $56.16 a barrel.

On Friday, a senior Mexican official expressed caution about the chances of ratifying a trade agreement between the United States, Mexico and Canada, saying more work might be needed to overcome opposition from some U.S. Democrats.

Canada sends about 75 per cent of its exports to the United States.

Canadian government bond prices were lower across a steeper yield curve, with the two-year down 6.5 cents to yield 1.621 per cent and the 10-year falling 77 cents to yield 1.546 per cent.

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The 10-year yield touched its highest intraday since Nov. 13 at 1.566 per cent.

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