TORONTO: The Canadian dollar steadied against its US counterpart on Friday but was on track for its third straight weekly decline, as oil prices fell and investors bet on an unusually large interest rate cut from the Bank of Canada.

The loonie was trading nearly unchanged at 1.38 to the US dollar, or 72.46 US cents, after moving in a range of 1.3786 to 1.3810. For the week, the currency was down 0.3%.

“The fact that USD-CAD ends the week flirting with a break above 1.38 should not be a surprise,” said Nick Rees, senior FX market analyst at Monex Europe Ltd.

“While appearing hot on the surface, the recent September’s jobs data was much weaker in the details, while a counterpart CPI print seen this week was unambiguously soft.” Growth in Canada’s consumer price index slowed more than expected to 1.6% in September, which is below the Bank of Canada’s 2% target.

“Set against a backdrop of anemic growth, the data makes a strong case for the BoC to deliver a 50 bp (basis point) rate cut next week. We think they will too, suggesting that risks are skewed toward further loonie downside,” Rees said.

Investors see a roughly 90% chance the BoC will cut its benchmark interest rate by half a percentage point at a policy decision on Wednesday, swaps market data showed. The policy rate is currently at 4.25%.

It would be the fourth rate cut since June and the first reduction greater than 25 basis points in 15 years outside of the pandemic era.

The price of oil, one of Canada’s major exports, fell 1.4% to $69.70 a barrel as China’s economic growth slowed and threats to supply abated in the Middle East.