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The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from its highest level in nearly three weeks, as oil prices fell and investors grew more worried about the economic outlook.

The loonie was trading 0.4% lower at 1.2820 to the greenback, or 78.00 U.S. cents, after touching its strongest intraday level since May 5 at 1.2762.

“The weaker growth backdrop being priced into U.S. assets appears to be the core driver of today’s weakness in the loonie, on account of the high degree of integration between the U.S. and Canadian economies,” said Jay Zhao-Murray, market analyst at Monex Canada Inc.

Wall Street veered lower as fears over whether attempts to curb decades-high inflation growth could tip the U.S. economy into recession dampened investor risk appetite, while oil settled down 0.5% at $109.77 a barrel. Oil is one of Canada’s major exports.

Canadian factory sales rose 1.6% in April from March, largely driven by higher sales of petroleum and coal products, Statistics Canada said in a flash estimate. A separate estimate for the same month showed that wholesale trade rose 0.2%.

Canadian government bond yields fell across a steeper curve, tracking the move in U.S. Treasuries. The 2-year eased 7.7 basis points to 2.567% and the 10-year was down 2.9 basis points at 2.803%.

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