Prime News: Canadian Dollar Little Changed Ahead of Fed Meeting, Poloz Speech

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

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