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The Canadian dollar weakened against its U.S. counterpart on Monday as rising global trade tensions led to a sell-off in stock markets and as oil prices fell.

At 4 p.m. EDT, the Canadian dollar was trading 0.3 per cent lower at $1.3305 to the greenback, or 75.16 U.S. cents.

The currency traded in a range between $1.3270 and $1.3325. On Friday, it touched its weakest in one year at $1.3384.

“There is a bit of a risk-off feeling this morning in the market which is pushing the U.S. dollar higher against the Canadian dollar,” said Simon Côté, managing director, risk management solutions at National Bank Financial. “You see the stock market getting hit.”

Wall Street was pummelled by a growing trade dispute between the United States and other leading economies.

Canada exports many commodities and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows.

The price of oil fell as equity markets tumbled and as investors prepared for an extra one million barrels per day of crude to hit the markets after OPEC agreed to raise production.

U.S. crude oil futures settled 0.7 per cent lower at $68.08 a barrel.

Adding to headwinds for the loonie was weaker-than-expected domestic retail sales and inflation data on Friday, which has lowered expectations for a Bank of Canada interest rate increase next month.

Chances of a rate hike at the July 11 announcement have fallen to less than 50 per cent from about 70 per cent before the data, the overnight index swaps market showed.

Bank of Canada Governor Stephen Poloz will give a speech on Wednesday.

“As we have seen in the past our central bank governor has been leaning on any weak Canadian number that he can to justify not raising interest rates,” Côté said. “I would be very surprised to see Poloz being hawkish.”

Still, speculators have cut bearish bets on the Canadian dollar for a second straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of June 19, net short positions dipped to 14,014 contracts from 14,988 a week earlier.

Canadian government bond prices were higher across a flatter yield curve in sympathy with safe-haven assets such as Treasuries, with the 10-year rising 27 Canadian cents to yield 2.094 per cent.

The 10-year yield touched its lowest since March 29 at 2.082 per cent.