The Canadian dollar CADUSD was little changed against its U.S. counterpart on Wednesday as a preliminary domestic estimate showed factory sales falling in December and investors awaited a Bank of Canada interest rate decision.
Canada’s central bank is expected to raise interest rates to a 15-year high in the face of a tight job market and above-target inflation, but economists say the move could be the last in the current tightening cycle. The decision is due at 10 a.m. EST (1500 GMT).
Money markets see a roughly 80% chance of a 25-basis-point move, up from 70% on Tuesday, and expect the policy rate to peak at 4.50%.
Canadian factory sales most likely fell 1.8% in December from November, largely driven by decreases in the petroleum and coal product, wood product and primary metal industries, Statistics Canada said in a flash estimate.
The Canadian dollar was trading nearly unchanged at 1.3365 per greenback, or 74.82 U.S. cents, after moving in a range of 1.3344 to 1.3384.
Signs that central banks might need to keep hiking interest rates for longer helped cap the recent rally in equity markets, with world stocks pausing near five-month highs.
The price of oil, one of Canada’s major exports, steadied after a decline in the previous session, as a rise in U.S. crude inventories and global recession worries countered optimism for a demand recovery in China. U.S. crude prices were up 0.2% at $80.28 a barrel.
Canadian government bond yields edged higher across the curve, with the 10-year up about half a basis point at 2.863%.