TORONTO: The Canadian dollar was little changed against its US counterpart on Wednesday, outperforming some other major currencies ahead of an expected interest rate hike by the Bank of Canada.
The central bank will announce its policy decision at 10 a.m. (1400 GMT). Chances of a rate increase have climbed to more than 90 percent, from less than 80 percent before a deal to revamp the North American Free Trade Agreement was reached at the end of September.
The bank, which sees Canada’s economy operating near capacity, has hiked four times since July 2017 to leave its key policy rate at 1.50 percent.
At 8:59 a.m. (1259 GMT), the Canadian dollar was trading nearly unchanged at 1.3091 to the greenback, or 76.39 US cents. The currency traded in a narrow range of 1.3070 to 1.3102.
The loonie and the Australian dollar were the only G10 currencies not to lose ground against the greenback.
The US dollar climbed against a basket of currencies as data, showing business growth in the single currency area lost more momentum than expected, weighed on the euro.
The price of oil, one of Canada’s major exports, rebounded after hitting a two-month low the day before. The focus returned to looming US sanctions on oil exporter Iran, although concern about a weaker demand outlook weighed.
US crude prices were up 0.8 percent at $66.96 a barrel.
Canadian government bond prices were mixed across a flatter yield curve. The two-year price was unchanged to yield 2.275 percent and the 10-year rose 10 Canadian cents to yield 2.437 percent.
On Tuesday, the 10-year yield hit its lowest in nearly four weeks at 2.418 percent.
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Source: Brecorder
