The Canadian dollar CADUSD was little changed against its U.S. counterpart on Monday as investors held off from making major bets ahead of a Bank of Canada interest rate decision this week, with the outcome seen as uncertain.
The loonie was trading nearly unchanged at 1.3380 to the greenback, or 74.74 U.S. cents after touching its strongest intraday level since Jan. 13 at 1.3343 – a level that was not far off its strongest since November.
“The Canadian dollar treads water near two-month highs despite strength from other commodity currencies,” said Michael Goshko, senior market analyst at Convera Canada.
“Traders are likely unwilling to add to positions until they see the Wednesday Bank of Canada monetary policy decision and guidance.”
The Australian dollar rose 0.8%. Australia, like Canada, is a major producer of commodities.
Money markets see a 70% chance that Canada’s central bank will raise its benchmark interest rate by 25 basis points to a 15-year high of 4.50% at a policy announcement on Wednesday.
The BoC will offer minutes from its policy-setting meeting for the first time in its history, a move some analysts say will help restore credibility lost last year amid soaring inflation and encourage out-of-the-box thinking.
Wall Street stocks climbed at the start of another big week for corporate earnings, while the price of oil, one of Canada’s major exports, largely held on to its recent gains, settling 2 cents lower at $81.62 a barrel.
Speculators have cut their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday.
Canadian government bond yields were higher across the curve on Monday, tracking the move in U.S. Treasuries.
The 10-year touched its highest level since last Monday at 2.904% before dipping to 2.883%, up 3.7 basis points on the day.