TORONTO, May 29 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday as concern that central banks could leave interest rates at elevated levels longer than previously thought raised demand for the safe-haven greenback.
The loonie was trading 0.5% lower at 1.3710 to the U.S. dollar, or 72.94 U.S. cents, after moving in a range of 1.3642 to 1.3717.
"Really, it's a (U.S.) dollar move. The Canadian dollar has fallen today in line with the rest of the G10 complex," said Erik Nelson, a currency strategist at Wells Fargo in London.
"Equities are off their (recent) highs, and rates in general are creeping up again, so concerns are resurfacing over the higher for longer theme and central banks not cutting as much as thought."
U.S. government bond yields pushed to a near four-week peak, lifting their global counterparts and pressuring stocks, as data sowed new doubts about the timing and extent of Federal Reserve rate cuts.
The U.S. dollar (.DXY), opens new tab rose against a basket of major currencies and the price of oil, one of Canada's major exports, gave back some recent gains. U.S. crude oil futures were down 0.7% at $79.26 a barrel.
Investors were awaiting Canadian gross domestic product data on Friday, expected to show the economy expanding at an annualized rate of 2.2% in the first quarter.
The data could provide clues on the timing of expected Bank of Canada interest rate cuts. The swaps market sees a 60% chance the BoC begins an easing campaign at a policy decision next Wednesday.
Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 5.9 basis points at 3.761%, after earlier touching its highest level since May 2 at 3.782%.
Reporting by Fergal Smith; Editing by Alistair Bell
