TORONTO: The Canadian dollar edged lower against the greenback on Tuesday amid investor concern over the crisis between Russia and Ukraine and ahead of upcoming interest rate decisions by the US Federal Reserve and the Bank of Canada.
The loonie was trading 0.1% lower at 1.2642 to the greenback, or 79.10 US cents, after trading in a range of 1.2619 to 1.2658.
On Monday, it touched its weakest intraday level in more than two weeks at 1.2701, pressured by equity market turbulance.
US stock index futures fell on Tuesday as investors assessed prospects for corporate earnings, with major companies including Microsoft due to report, and tighter impending monetary policy from the Fed.
Both the Fed and the BoC are due to make interest rate decisions on Wednesday. Despite uncertainty triggered by the Omicron variant of the coronavirus, Canada’s central bank could hike rates for the first time since October 2018 in an effort to tamp down inflation.
Fears that Russia will invade Ukraine have added to investor concerns, with NATO saying on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets.
The safe-haven US dollar gained ground against a basket of major currencies, while the price of oil, one of Canada’s major exports, was supported by bullish signals from a tight supply picture. US crude prices were up 0.5% at $83.72 a barrel.
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