November 12, 2019 / 3:51 PM / a month ago

C$ steadies near one-month low, weighed by BoC's more dovish stance

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday, holding near a one-month low it hit earlier in the day as the greenback broadly climbed and investors adjusted to the Bank of Canada’s more dovish stance.

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch/

The U.S. dollar .DXY rose against a basket of major currencies, although its gains stalled after U.S. President Donald Trump in a speech offered no new details on the state of the administration’s trade war with China.

“The big dollar is catching a bit of a bid,” said Michael Goshko, corporate risk manager at Western Union Business Solutions.

“We did get some indication from the Bank of Canada at the last meeting that it was likely to become more accommodative in the meetings ahead, so that’s also taking some of the starch out of the Canadian dollar as well,” Goshko said.

The loonie has declined by as much as 1.3% since Oct. 30, when Canada’s central bank cut its economic growth forecasts and expressed concern about global trade uncertainty.

Bank of Canada Governor Stephen Poloz is due to speak on Thursday, which could help guide expectations for the interest rate outlook.

At 3:24 p.m. (2024 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3231 to the greenback, or 75.58 U.S. cents. The currency’s strongest level of the session was 1.3217, while it touched its weakest since Oct. 11 at 1.3257.

The price of oil, one of Canada’s major exports, gave up its earlier gains after Trump’s speech. U.S. crude oil futures CLc1 settled 0.1% lower at $56.80 a barrel.

Canadian government bond prices were lower across a steeper yield curve as trading resumed after a holiday on Monday. The two-year CA2YT=RR fell 2.5 Canadian cents to yield 1.598% and the 10-year CA10YT=RR was down 17 Canadian cents to yield 1.599%.

It was the first time since July 25 that the 10-year yield traded above the 2-year yield. Reversion of the yield curve to upward sloping could reduce fears of an economic slowdown.

Reporting by Fergal Smith; Editing by Sandra Maler and Peter Cooney

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