The Canadian dollar was little changed against its broadly weaker U.S. counterpart on Wednesday as investors awaited further clues on the timing of the Federal Reserve’s asset purchase tapering.
The loonie was trading nearly unchanged at 1.2618 to the greenback, or 79.25 U.S. cents, after trading in a range of 1.2580 to 1.2637.
“When we look at the Canadian dollar right now it’s trading on broader developments and by that I mean the U.S. dollar, the broader move post Jackson Hole,” said Eric Theoret, global macro strategist at Manulife Investment Management.
Fed Chair Jerome Powell told the central bank’s annual Jackson Hole symposium on Friday that tapering of stimulus could start this year but its timing should not be construed as a signal for when interest rates will begin to rise.
The upcoming U.S. nonfarm payrolls report on Friday could “be very important for tapering,” Theoret said.
Domestic data showed that manufacturing activity grew in August at the fastest pace in four months as new orders climbed and firms scrambled to reduce the risk of running out of the stocks they need for production.
Canadian Prime Minister Justin Trudeau’s Liberal Party on Wednesday pledged a whopping C$78 billion in new investments over five years, with a focus on health care, if it wins the Sept. 20 federal election.
The U.S. dollar lost ground against a basket of major currencies, while the price of oil, one of Canada’s major exports, settled 0.1% higher at $68.59 a barrel as OPEC and its allies agreed to stick to their existing policy of gradual oil output increases.
Canadian government bond yields eased across the curve, with the 10-year down 2.8 basis points at 1.190%.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.