December 2, 2019 / 2:32 PM / 11 days ago

Loonie adds to November decline ahead of BoC rate decision

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday, adding to its November decline as investors worried about a potential escalation of global trade conflicts and awaited a Bank of Canada interest rate decision this week.

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. The Canadian dollar strengthened against the U.S. dollar on Friday after Canadian CPI data showed an increase in core inflation. REUTERS/Mark Blinch/File Photo

Stock markets reversed earlier gains after U.S. President Donald Trump said he would restore tariffs on some imports from Brazil and Argentina, overshadowing data showing that the Chinese and euro zone economies were stabilizing.

The Bank of Canada, which is expected on Wednesday to leave its benchmark interest rate at 1.75%, has expressed concern about global trade uncertainty.

The loonie has been pressured since October by a more dovish stance from the central bank.

At 9:04 a.m. (1404 GMT), the Canadian dollar CAD=D4 was trading 0.1% lower at 1.3295 to the greenback, or 75.22 U.S. cents. The currency, which fell 0.9% in November, traded in a range of 1.3275 to 1.3303.

The price of oil, one of Canada’s major exports, was supported by hints that OPEC and its allies may agree to deepen output cuts at a meeting this week and as rising manufacturing activity in China suggested stronger demand.

U.S. crude oil futures CLc1 were up 1.8% at $56.16 a barrel.

On Friday, a senior Mexican official expressed caution about the chances of ratifying a trade agreement between the United States, Mexico and Canada, saying more work might be needed to overcome opposition from some U.S. Democrats.

Canada sends about 75% of its exports to the United States.

Canadian government bond prices were lower across a steeper yield curve, with the two-year CA2YT=RR down 6.5 Canadian cents to yield 1.621% and the 10-year CA10YT=RR falling 77 Canadian cents to yield 1.546%.

The 10-year yield touched its highest intraday since Nov. 13 at 1.566%.

Reporting by Fergal Smith; Editing by Nick Zieminski

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