TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday as the greenback broadly fell and risk appetite improved.
At 9:17 a.m. EDT (1317 GMT), the Canadian dollar CAD= was trading 0.2 percent, or 77.38 U.S. cents, higher at C$1.2923 to the greenback.The currency, which rose 0.2 percent last week, traded in a range of C$1.2900 to C$1.2959.
The U.S. dollar DXY slipped against a basket of major currencies as easing Italian political tensions boosted the euro and investors’ appetite for risk.
Stocks and some other risk-sensitive assets, like the commodity-linked Canadian dollar, rose despite lingering worries about an escalating trade battle between the United States and other major economies.
Finance leaders of the closest U.S. allies vented anger over the Trump administration’s metal import tariffs on Saturday, ending a three-day meeting with a stern rebuke of Washington and setting up a heated fight at a G7 summit next week in Quebec.
The uncertainty over rising trade tensions and escalating retaliation in response to U.S. import tariffs means the Bank of Canada will be data-dependent as it sets monetary policy, Governor Stephen Poloz said on Saturday.
Expectations for a July interest rate hike were boosted last week by a more-hawkish-than-expected policy statement from the Bank of Canada. But data on Thursday showing Canada’s economy grew at a weaker-than-expected pace in the first quarter undercut expectations for a rate additional rate hikes after July. BOCWATCH
Speculators have cut bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of May 29, net short positions fell to 15,690 contracts from 26,212 a week earlier.
The price of oil, one of Canada’s major exports, were little changed as U.S. production hit a record high and OPEC members considered boosting supply. U.S. crude CLc1 prices were up 0.05 percent at $65.84 a barrel.
Canadian government bond prices were little changed across the yield curve, with the 10-year CA10YT=RR flat to yield 2.247 percent.
Reporting by Fergal Smith; Editing by Alistair Bell