Canadian dollar little changed as investors await Bank of Canada’s interest rate decision

Published On: January 22, 2020Categories: Trading1.5 min read

The Canadian dollar was little changed against the U.S. dollar as home prices moved higher in December and investors awaited a Bank of Canada interest rate decision this week

The Canadian dollar was little changed against its U.S. counterpart on Monday as domestic data showed home prices moving higher in December and investors awaited a Bank of Canada interest rate decision this week.

The Teranet-National Bank Composite House Price Index showed prices rose 0.2% last month from November, helped by gains for some metropolitan areas in the central and eastern parts of the country.

The Bank of Canada has pointed to housing activity as a source of resilience in the Canadian economy. The central bank is expected to leave its benchmark interest rate on hold at 1.75% on Wednesday, when it will also update its economic outlook.

A revival in the Canadian economy may already be under way, according to a Reuters poll of economists, who were mostly confident a rate cut was not needed and so predicted monetary policy would remain unchanged this year.

At 9:37 a.m. (1437 GMT), the Canadian dollar was trading nearly unchanged at 1.3059 to the greenback, or 76.58 U.S. cents. The currency, which has settled into a sideways trading pattern since hitting a near two-week low on Jan. 9 at 1.3104, traded in a range of 1.3050 to 1.3072.

Trading volumes were thin as Lunar New Year approaches in Asia and with U.S markets closed for Martin Luther King Day on Monday.

Speculators have raised bullish bets on the Canadian dollar for the third straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 14, net long positions had increased to 32,852 contracts from 26,367 in the prior week.

Canadian government bond prices were mixed across the yield curve on Monday, with the two-year            flat to yield 1.648 percent and the 10-year falling 9 Canadian cents to yield 1.572%.

Canada’s inflation report for December is due on Wednesday, while November retail sales data is due on Friday.

About the Author: Jonathan Adams

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