Canadian dollar dips against stronger greenback, rises 0.5 percent in April

The Canadian dollar edged lower against its broadly stronger US counterpart on Monday, but outperformed some other major currencies as oil prices rose and inflation data pointed to further Bank of Canada interest rate hikes this year. At 4 pm (2000 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2839 to the greenback, or 77.89 US cents.
For the month, the loonie rose 0.5 percent. It is the eighth time in the past 10 years that the loonie has climbed in April, a sequence strategists link to seasonal strength in stocks and energy products. Canadian producer prices increased by 0.8 percent in March from February, the third straight monthly rise, on higher prices of energy and petroleum products as well as paper and pulp, Statistics Canada said.
"Canadian inflation is continuing to rise," said Colin Cieszynski, chief market strategist at SIA Wealth Management. "That does keep the pressure on the Bank of Canada to raise rates at some point." The central bank has raised interest rates three times since July to leave its benchmark rate at 1.25 percent. Money markets expect another hike by September. Investors also weighed the prospect of Canada getting a further exemption from US tariffs on steel and aluminium imports. US President Donald Trump imposed the tariffs in March but granted a temporary exemption to Canada that runs out on Tuesday.
Prime Minister Justin Trudeau said any move by the United States to impose tariffs on Canadian steel and aluminium would be a "very bad idea" guaranteed to disrupt trade between the two nations. The price of oil, one of Canada's major exports, rose as Israeli Prime Minister Benjamin Netanyahu said Israel had proof that "Iran lied" about its nuclear weapons capability. US crude oil futures settled 0.7 percent higher at C$68.57 a barrel.
Weaker-than-expected German data hurt the euro against the US dollar, while the euro hit its weakest intraday level in more than two weeks against the loonie at C$1.5462. Canada's stock exchange, the world's sixth largest, was back in business after a hardware glitch abruptly ended trading on Friday. Canadian government bond prices were higher across the yield curve, with the two-year up 1.5 Canadian cents to yield 1.891 percent and the 10-year rising 14 Canadian cents to yield 2.308 percent. Canadian gross domestic product data for February is due on Tuesday and March trade data is due on Thursday.