TORONTO (Reuters) - The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Tuesday, as oil prices declined and ahead of comments by Bank of Canada Governor Stephen Poloz that could offer fresh clues on the outlook for interest rates.
Poloz will testify to legislators this afternoon about last week’s decision to raise its key interest rate by 25 basis points to 1.75 percent.
The central bank, which has hiked five times since July 2017, says the economy is working at full capacity and no longer needs stimulus. Money markets expect another rate increase as soon as January. BOCWATCH
The price of oil, one of Canada’s major exports, was depressed by concerns that the trade dispute between the United States and China will dent economic growth and by signs of rising global supply despite upcoming sanctions against Iran.
U.S. crude CLc1 prices were down 1.5 percent at $66.06 a barrel.
Worries about an escalation of the Sino-U.S. trade war and more signs the United States economy is outperforming rivals, helped boost the U.S. dollar, which notched a new 2 1/2-month high against a basket of currencies. Weak euro zone growth knocked the single currency lower.
At 8:59 a.m. (1259 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3136 to the greenback, or 76.13 U.S. cents.
The currency, which on Friday touched 1.3160, its strongest level in more than six weeks, traded in a range of 1.3102 to 1.3145.
The steady profile for the loonie also comes ahead of Canada’s gross domestic product data for August, due on Wednesday, and the September jobs report and August trade data due on Friday.
Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 4 Canadian cents to yield 2.283 percent and the 10-year CA10YT=RR declined 21 Canadian cents to yield 2.421 percent.
Reporting by Fergal Smith; Editing by David Gregorio