TORONTO, May 12 (Reuters) - The Canadian dollar weakened to a near four-week low against its U.S. counterpart on Tuesday as investors grew more risk averse and U.S. inflation data boosted the greenback.
The loonie was trading 0.3% lower at 1.3712 per U.S. dollar, or 72.93 U.S. cents, after touching its weakest intraday level since April 16 at 1.3724.
"The loonie is showing mild risk aversion," said Amo Sahota, director at Klarity FX in San Francisco.
"Attention this week is more so on the U.S. inflation outlook which jolted the market this morning, along with uncertainty over how the Iran conflict will impact the Trump-Xi meeting later in the week."
The U.S. dollar advanced for a second straight session after U.S. economic data showed inflation accelerated at a brisk pace, while uncertainty over the durability of a ceasefire in the Iran war also boosted the safe-haven greenback.
U.S. President Donald Trump was expected to discuss the war with Chinese President Xi Jinping during his trip to Beijing this week.
"Last week’s disappointing jobs report that saw the UR (unemployment rate) rise to 6.9% will still be weighing on positioning," Sahota said.
Data on Friday showed that Canada's economy lost 17,700 jobs in April and the unemployment rate rose to a six-month high of 6.9%, indicating continued weakness in a labor market that has struggled in the face trade uncertainty.
Still, investors are betting that the Bank of Canada will raise interest rates twice by December as the recent surge in oil prices boosts the inflation outlook.
The price of oil, one of Canada's major exports, was trading 3.5% higher at $101.52 a barrel as supply concerns moved back into the spotlight.
Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 5.5 basis points at 3.594%, marking its highest level since last Tuesday.
Reporting by Fergal Smith; Editing by Alistair Bell
