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The Canadian dollar weakened on Tuesday for a second day against its broadly stronger U.S. counterpart, as investors weighed the potential impact of new coronavirus outbreaks in Asia on global economic recovery.

The loonie was trading 0.2 per cent lower at 1.2364 to the greenback, or 80.88 U.S. cents, after touching its weakest intraday level since last Tuesday at 1.2387.

The safe-haven U.S. dollar rallied as Australia and some countries in Asia reimposed lockdowns to contain the spread of the highly infectious Delta variant of the virus.

Oil reversed earlier losses, rising 1 per cent to $73.55 a barrel, but copper, seen as a gauge of global financial health, fell for a fourth day. Canada is a major producer of both commodities.

Canadian GDP data for April is due on Wednesday and the U.S. nonfarm payroll report is due on Friday.

The U.S. data could offer clues on the Federal Reserve’s policy outlook. The U.S. central bank rattled markets earlier this month, shifting to more hawkish guidance.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries. The 10-year rose 2.3 basis points to 1.439 per cent.

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