The Canadian dollar was little changed against its U.S. counterpart as oil prices pared gains before tomorrow’s central-bank decision, in which policy makers are expected to keep interest rates unchanged.
Oil, Canada’s biggest export, rose earlier from the lowest level in 10 weeks as traders speculated recent declines may have been excessive. The currency touched the strongest level versus the greenback since Feb. 28 as the Bank of Canada is forecast to keep its benchmark rate on overnight loans between commercial banks at 1 percent, according to a Bloomberg survey of economists.
“We’re trading in the range we’ve been in the past four days,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia (BNS), said by telephone from Toronto. “Part of that is likely because we have Bank of Canada tomorrow. We’re unlikely to make a major shift leading right into that.”
The loonie, as the Canadian dollar is known for the image of the waterfowl on the C$1 coin, traded at C$1.0275 per U.S. dollar at 9:06 a.m. in Toronto. One loonie buys 97.32 U.S. cents.
BOC Governor Mark Carney last month said the need to raise interest rates is less urgent because the economy will take longer to reach full output, keeping inflation below target until the second half of next year.
“The market has gone from pricing in interest-rate hikes in Canada to pricing in the potential for interest-rate cuts over the next 12 months,” Sutton said. “I think they maintain an overall hawkish bias, though they continue to pare back that hawkish tone.”
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