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The Canadian dollar edged lower against its U.S. counterpart on Friday, but was on track to end a volatile week slightly higher as global equity markets rose and a preliminary estimate showed Canadian retail sales recovering in June.

The loonie weakened 0.1 per cent to 1.2582 per greenback, or 79.48 U.S. cents. Since the start of the week, the Canadian currency has gained 0.2 per cent, after three weekly declines.

It was pressured earlier in the week by worries that the Delta variant of the coronavirus would impede the global economic recovery. On Monday, it hit a five-month low of 1.2807.

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World stocks rose as a survey showed business activity in the euro zone expanded in July at its fastest monthly pace in over two decades, while oil, one of Canada’s major exports, fell 0.6 per cent to $71.46 a barrel.

Still, oil was on track to end the week little changed after a surprising recovery from Monday’s slide, underpinned by expectations that supply will remain tight as demand recovers.

Canadian retail sales dropped 2.1 per cent in May from April, Statistics Canada said, less than a 3.0 per cent decline forecast by analysts. A flash estimate for June showed a gain of 4.4 per cent as businesses forced to shut down amid a potent third wave of COVID-19 infections began to reopen.

Last week, the Bank of Canada took a mostly optimistic stance on the country’s economy as it cut the pace of bond purchases to C$2-billion per week.

Yields on Canadian government bonds were higher across the curve on Friday as U.S. Treasury yields climbed. The 10-year rose 1.3 basis points to 1.217 per cent, after hitting a five-month low of 1.104 per cent on Tuesday.

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