CANADIAN DOLLAR – The Canadian dollar stabilizes pending the Bank of Canada minutes

CANADIAN DOLLAR – The Canadian dollar stabilizes pending the Bank of Canada minutes
CANADIAN DOLLAR – The Canadian dollar stabilizes pending the Bank of Canada minutes

The Canadian dollar was little changed against its U.S. counterpart on Tuesday, as investors weighed weaker-than-expected U.S. retail sales data and awaited possible clues about the prospects for further interest rate cuts by the Bank of Canada.

The loonie was trading almost unchanged at 1.3720 per US dollar, or 72.89 US cents, after trading in a range of 1.3710 to 1.3756. The currency has been in a holding pattern since hitting a nearly two-month low of 1.3791 last Tuesday.

“Slightly weaker (U.S.) retail sales (on Tuesday) are just ensuring that the dollar doesn’t run away,” said Rahim Madhavji, president of KnightsbridgeFX.com.

The US dollar retreated against a basket of major currencies after retail sales data indicated signs of exhaustion among US consumers, boosting the case for Federal Reserve rate cuts later this year.

The BoC this month became the first G7 central bank to start cutting interest rates. The minutes of the June 5 political decision will be published on Wednesday.

“We’re going to see in the minutes what the Bank of Canada is thinking in terms of rate cuts and whether they are even considering the weakness of the Canadian dollar as part of their rate cut decision,” Madhavji said.

Data on Friday showed that speculators have raised their bearish bets on the currency to a record level.

The price of oil, one of Canada’s main export products, was 1.5% above $81.57 a barrel, extending its recent gains.

Canadian government bond yields fell across the curve, following movements in US Treasuries. The 10-year bond fell 4.2 basis points to 3.274%. (Reporting by Fergal Smith; Editing by Will Dunham)

 
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