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The Canadian dollar CADUSD weakened against its U.S. counterpart on Monday, pulling back from a two-month high, as investor appetite for risk declined and ahead of the Bank of Canada’s interest-rate decision this week.

The loonie was trading 0.4% lower at 1.3550 to the greenback, or 73.80 U.S. cents, after earlier touching its strongest level since Sept. 29, at 1.3481.

“It has been more of a general risk-off day today,” said George Davis, chief technical strategist at RBC Capital Markets. “This has set the stage for broad-based USD strength which has served to weaken CAD as well.”

U.S. stocks fell after rallying last week and the safe-haven U.S. dollar rose against a basket of major currencies, on caution ahead of a slew of economic data due this week.

The price of oil, one of Canada’s major exports, extended recent declines, pressured by investor skepticism over the latest OPEC+ decision on supply cuts. U.S. crude oil futures settled 1.4% lower at $73.04 a barrel.

Speculators have cut bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Nov. 28, net short positions had decreased to 63,242 contracts from 65,440 in the prior week.

The Bank of Canada will start cutting interest rates in the second quarter of next year as inflation and the economy slow, according to economists polled by Reuters.

Canadian government bond yields rose across the curve, tracking moves in U.S. Treasuries. The 10-year was up 7 basis points at 3.492% after touching on Friday its lowest level since July 25, at 3.422%.

Canada has been criticized for years for failing to meet its debt-reduction goals, and many economists say Prime Minister Justin Trudeau’s Liberal government lacks credibility after repeatedly choosing more spending over fiscal discipline.

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