TORONTO, June 12 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday, giving back some recent gains, as oil prices tumbled and investors managed their positions ahead of U.S. data this week that could provide clues on the Federal Reserve policy outlook.
The loonie was trading 0.3% lower at 1.3375 to the greenback, or 74.77 U.S. cents, after touching on Friday its strongest intraday level in nearly two months at 1.3311.
"The Canadian dollar has cooled off a bit here as U.S. yields and the broader USD reverse higher," said Erik Bregar, director, FX & precious metals risk management, at Silver Gold Bull.
"The catalyst is unclear, perhaps a little bit of hawkish Fed hedging in the bond market ahead of the U.S. CPI report and FOMC meeting on deck over the next two days."
The U.S. consumer price index reading on Tuesday is expected to show inflation cooled slightly in May but core prices likely remained sticky.
Investors widely expect the Fed's policy-setting Federal Open Market Committee will keep its benchmark overnight interest rate steady in the 5.00%-5.25% range at the end of its two-day meeting on Wednesday.
Data on Friday showed that Canada's economy unexpectedly shed jobs in May. Still, the economy has been running too hot to bring inflation back to the Bank of Canada's 2% target, forcing the bank to restart its interest rate hiking campaign.
The price of oil , one of Canada's major exports, fell 3.9% to $67.46 a barrel on Monday as analysts highlighted rising global supplies and concerns about demand growth.
Canadian bond yields were lower across the curve. The 10-year eased 2 basis points to 3.355%, while the gap between it and its U.S. equivalent widened by 4.6 basis points to about 42 basis points in favor of the U.S. bond.
