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The Canadian dollar weakened against its U.S. counterpart on Friday, as the greenback broadly rose and investors saw risk that the Bank of Canada would remark on the loonie’s recent appreciation at an interest rate decision next week.

The central bank is expected to leave its benchmark interest rate on hold at 1.75 per cent next Wednesday, when it will also update its economic outlook.

“We do expect that the loonie may make an appearance in the statement with respect to how the CAD has appreciated versus other currencies,” said Bipan Rai, North America head, FX strategy at CIBC Capital Markets.

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A stronger Canadian dollar could reduce the competitiveness of Canada’s exports, hurting the country’s trade-dependent economy. The loonie climbed 5 per cent against the U.S. dollar in 2019, helped by a strong finish to the year, while it notched even bigger gains against some other major currencies, such as the euro .

At 3:24 p.m., the Canadian dollar was trading 0.2 per cent lower at 1.3062 to the greenback, or 76.56 U.S. cents. The currency traded in a range of 1.3034 to 1.3076, while it was down 0.1 per cent for the week.

The U.S. dollar gained ground against a basket of major currencies, buoyed by encouraging U.S. economic data, while U.S. crude oil futures settled 2 cents higher at $58.54 a barrel.

Oil is one of Canada’s major exports.

A revival in the Canadian economy may already be under way, according to a Reuters poll of economists, who were mostly confident a rate cut was not needed and so predicted monetary policy would remain unchanged this year.

Speculators raised bullish bets on the Canadian dollar for the third straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Jan. 14, net long positions had increased to 32,852 contracts from 26,367 in the prior week.

Foreign investors sold a net $1.75 billion in Canadian securities in November, led by private corporate instruments, following a revised $11.32 billion total purchase in October, Statistics Canada said.

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Canadian government bond prices were mixed across a steeper yield curve, with the 10-year falling 14 cents to yield 1.570 per cent.

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