The Canadian dollar CADUSD weakened against its U.S. counterpart on Monday as oil prices fell and investors awaited an interest rate decision this week by the Bank of Canada.
The loonie was trading 0.1 per cent lower at 1.3575 to the U.S. dollar, or 73.66 U.S. cents, after trading in a range of 1.3546 to 1.3583. Last Wednesday, it touched a 2-1/2-month low at 1.3605.
Investors are looking “for more details on the interest rate path of the BoC,” Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc, said in a note.
A dovish statement from the central bank could weigh on the Canadian dollar, Richardson added.
Money markets expect the Canadian central bank to leave its benchmark rate on hold at a 22-year high of 5 per cent on Wednesday but to then begin an easing cycle in April or June as the domestic economy slows and inflation cools.
Data due on Friday is expected to show the economy adding 20,000 jobs in February, which would be a slower pace than in January.
The price of oil, one of Canada’s major exports, fell as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the OPEC+ producer group. U.S. crude oil futures settled 1.5 per cent lower at $78.74 a barrel.
Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 2.7 basis points at 3.455 per cent after touching on Friday its lowest intraday level in three weeks at 3.423 per cent.