The Canadian dollar fell against its U.S. counterpart on Tuesday, approaching the weakest level since August, as an uncertain outlook for the Canadian economy supported recent moves by investors to increase bearish bets on the currency.

The loonie was trading 0.3 per cent lower at 1.3845 per U.S. dollar, or 72.23 U.S. cents, after moving in a range of 1.3794 to 1.3848. On Friday, the currency touched a 9-day low at 1.3854.

“This weakness is partially attributable to an increase in net-short institutional positioning,” said Kevin Ford, FX & macro strategist at Convera.

“While Canada benefits from the CUSMA deal and has one of the lowest effective tariff rates globally, tariffs on other sectors and ongoing uncertainty about a new trade deal with the U.S. continue to dampen the medium-term

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