TORONTO, Jan 6 (Reuters) - The Canadian dollar fell for a sixth straight day against its U.S. counterpart on Tuesday, as investors bet that a potential increase in Venezuelan oil flows to the United States could weaken Canada's hand in negotiations to renew a continental trade pact.
The loonie was trading 0.2% lower at 1.3790 per U.S. dollar, or 72.52 U.S. cents, after moving in a range of 1.3752 to 1.3796. The currency has weakened each trading day since December 29.
"The prospect of Venezuelan oil replacing some Canadian supply has prompted a reassessment of previously bullish 2026 CAD views," said Kevin Ford, FX & macro strategist at Convera.
"While most Canadian crude shipped to the U.S. moves through the Midwest, not the Gulf Coast, where competition with Venezuelan barrels would be more direct, markets are still pricing in a loss of leverage ahead of the CUSMA review."
The Canada-United States-Mexico Agreement, which has shielded much of Canada's exports from U.S. tariffs, is up for joint review this year.
Canadian crude oil is low-risk and will stay competitive even if output in Venezuela rises after the U.S. capture of President Nicolas Maduro, Prime Minister Mark Carney said.
Canada's services economy remained in contraction in December as trade uncertainty weighed on employment and client spending, S&P Global's Canada services PMI data showed. The headline Business Activity Index rose to 46.5 last month from 44.3 in November but remained below the 50 no-change mark.
"Local markets are also turning cautious ahead of Friday’s domestic employment report," Ford said.
Canada's employment report for December, due on Friday, is expected to show the economy shedding 5,000 jobs and the unemployment rate ticking up to 6.6% from 6.5% in November.
The price of oil , one of Canada's major exports, fell 1.2% to $57.66 a barrel as the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude supplies.
Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 2.6 basis points at 3.447%.
Reporting by Fergal Smith; Editing by Andrea Ricci
