TORONTO: The Canadian dollar weakened against its US counterpart on Wednesday as crude oil prices fell, but trading was in a narrow range in the hours before the US Federal Reserve interest rate decision.
US crude prices were down 0.43 percent at $37.19 a barrel following more evidence of growing global oversupplies, while Brent crude lost 1.77 percent to $37.77.
US housing data revealed signs of strength that could give the Fed more confidence to raise interest rates on Wednesday afternoon for the first time since June 2006.
On Tuesday, weak manufacturing data weighed on the domestic outlook, and Bank of Canada Governor Stephen Poloz signaled clearly that markets should not expect him to match potential Fed rate hikes.
At 8:39 a.m. EST (1339 GMT), the Canadian dollar was trading at C$1.3760 to the greenback, or 72.67 US cents, weaker than Tuesday's close of C$1.3738, or 72.79 US cents.
The currency's strongest level of the session was C$1.3729, while its weakest was C$1.3779, just shy of Monday's 11-1/2-year low of 1.3780.
Foreign investors bought a net C$22.08 billion of Canadian securities in October, mostly in bonds. The net total is up from C$3.35 billion in September, Statistics Canada said.
Canadian government bond prices were lower across the maturity curve in sympathy with US Treasuries.
The two-year price was down 5.5 Canadian cents to yield 0.545 percent, and the benchmark 10-year fell 26 Canadian cents to yield 1.518 percent.
The Canada-US 10-year spread was little changed at -77.5 basis points, trading near its deepest negative level in nearly four months.
Canadian inflation data for November is awaited on Friday. A Reuters poll shows a pickup in the consumer price index to a 1.5 percent pace from a year earlier.
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