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The Canadian dollar CADUSD strengthened against its U.S. counterpart on Monday as the recent selloff in risk-sensitive assets paused and ahead of domestic data this week that could show inflation climbing to a new multi-decade high.

The Canadian dollar was trading 0.2% higher at 1.30 to the greenback, or 76.92 U.S. cents, after trading in a range of 1.2979 to 1.3038. On Friday, it touched its weakest since November 2020 at 1.3078.

“The CAD has recently suffered from a steep deterioration in risk sentiment in markets amid building recession fears and unpredictability over the Fed’s (U.S. Federal Reserve) future policy path,” strategists at Scotiabank, including Shaun Osborne, said in a note.

Stock markets chalked up modest gains after last week’s hefty losses as investors braced for a host of Fed speakers this week, where they could underline a commitment to fight inflation whatever rate pain required.

Wall Street was closed on Monday for the Juneteenth holiday.

The risk of inflation becoming entrenched in Canada’s economy is growing, say analysts, as surging prices for gas and other highly visible consumer items undercut efforts by the Bank of Canada to keep expectations for price increases in check.

Canada’s consumer price index data for May, due on Wednesday, is expected to show inflation climbing to 7.4%.

“Elevated inflation and concerns over unmoored inflation expectations combined with a strong economy should prompt the BoC to increase its overnight rate by 75 bps (basis points) at its July meeting,” the Scotiabank strategists said.

Money markets see a 70% chance of a three-quarter-percentage-point rate increase.

Oil , one of Canada’s major exports, was up 0.7% at $110.27 a barrel, while the U.S. dollar dipped against a basket of major currencies.

Canadian government bond yields were higher across the curve, with the 10-year up 5.5 basis points at 3.463%.

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