TORONTO, July 15 (Reuters) - The Canadian dollar retreated against its U.S. counterpart on Wednesday following U.S. Federal Reserve comments that helped lift the greenback and North American data that included slightly lower-than-expected Canadian manufacturing sales in May.
The U.S. dollar, a significant driver for the loonie, rose after Fed Chair Janet Yellen said the U.S. central bank was on track to hike interest rates this year, with uncertainties outside of the United States unlikely to hurt its economy.
At 9:01 a.m. EDT (1301 GMT), the Canadian dollar, which had been flat ahead of the Bank of Canada’s rate decision later this morning, softened to a session low of C$1.2792 to the U.S. dollar, or 78.17 U.S. cents. It had closed at C$1.2740, or $78.49 U.S. cents on Tuesday.
All eyes are otherwise on the Bank of Canada amid growing predictions of another rate cut. Markets had been pricing in about a 47 percent chance of a 25-basis-point rate cut in July. The first cut was in January and the bank’s benchmark rate is now 0.75 percent.
Reporting by Solarina Ho; Editing by Nick Zieminski