The Canadian dollar edged higher against its U.S. counterpart on Friday but was still headed for a weekly and monthly decline as domestic gross domestic product data bolstered bets for an outsized interest rate cut from the Bank of Canada in December.

The loonie was trading 0.2 per cent higher at 1.4005 to the U.S. dollar, or 71.40 U.S. cents, moving closer to the roughly 1.3985 level prevailing before Trump vowed on Monday to impose a 25 per cent tariff on imports from Canada and Mexico as one of his first executive orders.

The Canadian dollar clawed back some of its decline against its U.S. counterpart on Tuesday as investors weighed the likelihood of hefty trade tariffs pledged by U.S. President-elect Donald Trump on Canadian products being implemented.