The Canadian dollar was nearly flat versus the US currency as investors turned their focus on this week’s Federal Reserve interest rate hike decision as well as a speech by Bank of Canada Governor Stephen Poloz.
The loonie fell 1.3 percent the previous week after the central bank delivered a more dovish tone than investors had anticipated. The Bank of Canada kept its benchmark interest rate at one percent.
The Canadian central bank is concerned about a number of uncertainties that could impact the nation’s economy, which includes renegotiations on the North American Free Trade Agreement.
NAFTA talks convene in Washington next week for a limited round of negotiations aimed at demonstrating progress toward closing easier chapters.
The U.S. central bank is widely expected to hike interest rates at its two-day policy meeting, and is seen possibly tightening rates two or three times next year.
The Canadian dollar traded in a narrow range of C$1.2832 to C$1.2868. On Friday, it reached its weakest level in a week, at C$1.2880.
According to U.S. Commodity Futures Trading Commission data and Reuters calculations, speculators reduced bullish wagers on the Canadian currency.
Canadian government bond prices were lower across much of a flatter yield curve, with the two-year off by 1.5 Canadian cents to yield 1.512 percent and the 10-year dropping 1 Canadian cent to yield 1.862 percent.
The gap between Canada’s two-year yield and its U.S. equivalent widened by 1.5 basis points to a spread of -31.1 basis points.
The material has been provided by InstaForex Company – www.instaforex.com