The Canadian dollar closed slightly lower Monday amid rising U.S. bond yields and falling commodity prices.
The loonie closed down 0.03 of a cent to 96.69 cents (U.S.).
Oil and metal prices were lower following strong advances last week.
The September crude contract on the New York Mercantile Exchange fell 36 cents to $107.10 a barrel after the continuing violence in Egypt helped push oil up 10 per cent last week.
September copper dipped 3 cents to $3.33 a pound while December gold bullion fell $5.30 to $1,365.70 an ounce.
The major event for markets this week is the release Wednesday of the U.S. Federal Reserve’s minutes from its most recent meeting at the end of last month. Investors hope to get a better idea of the pace at which the Fed will start to wind up a key measure of economic stimulus next month.
Recent economic data and public statements by Fed policy makers have reinforced the point of view that the central bank will begin tapering its $85-billion a month in bond purchases as early as September. The policy, which is intended to lower interest rates to shore up the U.S. recovery, has also been credited for a strong rally on many global markets.
Speculation about Fed tapering continued to send U.S. bond yields higher, with the benchmark 10-year Treasury at 2.88 per cent late Monday afternoon, up 0.05 of a point from Friday.
“In some ways the Fed’s message has already been delivered,” said Scotia Capital chief currency strategist Camilla Sutton.
“The U.S. 10-year yield is up [about] 118 basis points since the end of April, more than any other major economy’s bond yield.”
Other key events this week include the release of Canadian retail sales data for June on Thursday and inflation data for July on Friday.
Beyond the release of the Fed minutes Wednesday, traders will also look to existing home sales data for July on Wednesday and new home sales for July on Friday.