TORONTO: The Canadian dollar steadied against its US counterpart on Wednesday after touching its strongest intraday level in nearly three weeks, as oil prices pared some recent gains and a holiday in the United States restrained activity in currency markets.
US crude oil, which notched a 3-1/2-year high on Tuesday, slipped 0.5 percent to $73.77 a barrel. Oil is one of Canada’s major exports.
Major currencies largely traded within ranges with Independence Day celebrations in the United States discouraging traders from taking big positions, not least until there is some clarity about where escalating US-China trade tensions are heading. Washington is due to impose tariffs on Chinese imports at the end of the week.
At 9:26 a.m. EDT (1326 GMT), the Canadian dollar as trading nearly unchanged at C$1.3142 to the greenback, or 76.09 US cents. The currency touched its strongest since June 15 at C$1.3113.
Recent domestic data has supported the view that the Bank of Canada could hike its benchmark interest rate, which sits at 1.25 percent, for the fourth time since last summer.
On Tuesday, data showed that growth in the Canadian manufacturing sector accelerated in June to its fastest pace in more than seven years.
Money markets see a greater-than 70 percent chance of a rate increase at the July 11 announcement.
Still, a trade dispute with the United States and slow-moving talks to revamp the North American Free Trade Agreement cloud the outlook for Canada’s economy.
Also, reduced Canadian oil supplies after a production problem at the Syncrude oil sands facility in Alberta could hurt the country’s economic growth in the third quarter.
Canadian government bond prices were mixed across the yield curve, with the two-year price flat to yield 1.895 percent and the 10-year falling 5 Canadian cents to yield 2.144 percent.
On Tuesday, the 10-year yield touched its highest intraday level in more than two weeks at 2.204 percent.
Canada’s employment report for June and trade data for May are due out on Friday.
Source: Brecorder
