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The Canadian dollar CADUSD edged lower against its U.S. counterpart on Friday, pulling back from an earlier two-week high, as volatility in global equity markets bolstered demand for the safe-haven greenback.

The loonie was trading 0.1% lower at 1.2832 to the greenback, or 77.93 U.S. cents, after touching its strongest since May 5 at 1.2777.

“What we are seeing in all of the volatility in markets in recent days is that there is this safe-haven bid for the U.S. dollar,” said Royce Mendes, director & head of macro strategy at Desjardins.

The U.S. dollar climbed against a basket of major currencies and U.S. stocks came close to confirming a bear market, after major retailers contributed this week to fears about a slowing economy.

Meanwhile, the price of oil, one of Canada’s major exports, settled 0.9% higher at $113.23 a barrel as a planned European Union ban on Russian oil countered growth concerns.

“The Canadian dollar seems to be detached from oil prices,” Mendes said. “That’s not all that surprising given that we are not hearing about much investment going into the ground in the oil patch.”

Speculators have raised their bearish bets on the Canadian dollar to the highest since October, data from the U.S. Commodity Futures Trading Commission showed. As of May 17, net short positions had increased to 14,496 contracts from 5,407 in the prior week.

Still, the loonie gained 0.6% for the week, ending a losing streak of seven straight weeks, after hotter-than-expected Canadian inflation data on Wednesday raised pressure on the Bank of Canada to tighten policy quickly.

Canadian bond yields fell across the curve in a shortened session ahead of the Victoria Day holiday on Monday. The 10-year was down 5 basis points at 2.832%, trading near a three-week low.

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