Views Article – Sharenet Wealth

Forex, News

Loonie idles ahead of Bank of Canada rate decision this week

* Canadian dollar trades near flat against the greenback * Canadian home prices rise 0.2% in December * Price of U.S oil increases 0.7% * Canadian bond prices trade mixed across the yield curve TORONTO, Jan 20 (Reuters) – The Canadian dollar was little changed against its U.S. counterpart on Monday as domestic data showed home prices moving higher in December and investors awaited a Bank of Canada interest rate decision this week. The Teranet-National Bank Composite House Price Index showed prices rose 0.2% last month from November, helped by gains for some metropolitan areas in the central and eastern parts of the country. The Bank of Canada has pointed to housing activity as a source of resilience in the Canadian economy. The central bank is expected to leave its benchmark interest rate on hold at 1.75% on Wednesday, when it will also update its economic outlook. A revival in the Canadian economy may already be under way, according to a Reuters poll of economists, who were mostly confident a rate cut was not needed and so predicted monetary policy would remain unchanged this year. At 9:37 a.m. (1437 GMT), the Canadian dollar was trading nearly unchanged at 1.3059 to the greenback, or 76.58 U.S. cents. The currency, which has settled into a sideways trading pattern since hitting a near two-week low on Jan. 9 at 1.3104, traded in a range of 1.3050 to 1.3072. Trading volumes were thin as Lunar New Year approaches in Asia and with U.S markets closed for Martin Luther King day on Monday. The price of oil, one of Canada’s major exports, rose after two large crude production bases in Libya began shutting down amid a military blockade, risking reducing crude flows from the OPEC member to a trickle. U.S. crude oil futures were up 0.7% at $58.94 a barrel. Speculators have raised bullish bets on the Canadian dollar for the third straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 14, net long positions had increased to 32,852 contracts from 26,367 in the prior week. Canadian government bond prices were mixed across the yield curve on Monday, with the two-year flat to yield 1.648 percent and the 10-year falling 9 Canadian cents to yield 1.572%. Canada’s inflation report for December is due on Wednesday, while November retail sales data is due on Friday. (Reporting by Fergal Smith; editing by Nick Macfie)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.