By Fergal Smith
TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday as investor worries about prospects for the global economy offset domestic data showing a record gain for factory sales, but the loonie held on to most of this week's rally.
Global stocks <.WORLD> dipped as data out of China, the euro zone and the United States put a lid on expectations for a sustained global rebound, with traders already worried about a delay in U.S. fiscal stimulus.
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie
The currency was trading 0.2% lower at 1.3248 to the greenback, or 75.48 U.S. cents. The currency, which on Thursday notched a 6-1/2-month high at 1.3188, traded in a range of 1.3206 to 1.3270. For the week, the loonie advanced 1%.
Higher commodity prices and strong economic data "underpinned Canadian dollar strength this week," said Michael Goshko, corporate risk manager at Western Union Business Solutions.
Canadian manufacturing sales rose 20.7% in June as many factories operated at a much higher capacity than in May.
U.S. crude
"Stronger commodity prices for Canadian exports creates greater external demand for the (Canadian) dollar," Goshko said.
The United States will extend a ban on non-essential travel at land borders with Canada and Mexico for another 30 days as several states struggle to contain the coronavirus outbreak, a top U.S. official confirmed.
Canadian government bond yields were lower across a flatter curve, with the 10-year
(Reporting by Fergal Smith; Editing by Nick Zieminski and Jonathan Oatis)