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The Canadian dollar CADUSD weakened against its U.S. counterpart on Monday, approaching a five-month low, ahead of domestic inflation data that could offer clues on the timing of Bank of Canada interest rate cuts.

The loonie was trading 0.1 per cent lower at 1.3785 per U.S. dollar, or 72.54 U.S. cents, after trading in a range of 1.3726 to 1.3786. On Friday, it touched its weakest intraday level since Nov. 14 at 1.3787.

“The CAD is liable to remain soft unless or until there are some significant changes in U.S. or Canadian monetary policy dynamics,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

Bank of Canada Governor Tiff Macklem has said a rate cut in June was possible if a recent cooling trend in inflation is sustained. Canada’s March consumer price index report, due on Tuesday, is expected to show inflation rising to an annual rate of 2.9 per cent from 2.8 per cent in February. The February rate was the slowest in eight months.

Also on Tuesday, Canada is due to present its budget. Finance Minister Chrystia Freeland will have to find ways to amp up savings or raise taxes as recent new heavy spending plans further risks weakening government finances, economists say.

Speculators have raised their bearish bets on the Canadian dollar to the highest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 9, net short positions had increased to 53,385 contracts from 51,223 in the prior week.

Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries following stronger-than-expected U.S. retail sales data. The 10-year was up 9.6 basis points at 3.757 per cent after earlier touching its highest level since Nov. 15 at 3.781 per cent.

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