March 12, 2019 / 1:37 PM / 4 months ago

Canadian dollar dips after posting near one-week high as oil climbs

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. The Canadian dollar strengthened against the U.S. dollar on Friday after Canadian CPI data showed an increase in core inflation. REUTERS/Mark Blinch

TORONTO (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday but held near its strongest in nearly a week as oil prices rose and tame U.S. inflation data weighed on the greenback.

The price of oil, one of Canada’s major exports, was supported by Saudi Arabia’s plan for further voluntary supply curbs in April and a cut in oil exports from Venezuela due to a power outage. U.S. crude oil futures rose nearly 1 percent to $57.33 a barrel.

The U.S. dollar fell against a basket of major currencies after data showed the smallest annual gain for U.S. consumer prices in nearly 2-1/2 years.

At 9:13 a.m. (1313 GMT), the Canadian dollar was trading 0.1 percent lower at 1.3403 to the greenback, or 74.61 U.S. cents. The currency touched its strongest intraday level since last Wednesday at 1.3383.

The six-day high for the loonie came after domestic data on Friday showed a bumper jobs gain in February.

Still, money market data indicates that there is about a 20 percent chance of an interest rate cut this year from the Bank of Canada. The central bank has tightened 125 basis points since July 2017.

Bank of Canada Senior Deputy Governor Carolyn Wilkins is due to speak on Thursday, while Canadian manufacturing sales data for January is due on Friday.

Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 1 Canadian cent to yield 1.652 percent and the 10-year was up 8 Canadian cents to yield 1.745 percent.

On Friday, the 10-year yield touched its lowest since June 2017 at 1.732 percent.

Reporting by Fergal Smith; editing by Jonathan Oatis

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