Saturday, May 21

Canadian dollar steadies as oil prices climb

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TORONTO — The Canadian dollar steadied

against its US counterpart on Monday, as higher oil prices

offset broad-based gains for the greenback and investors awaited

domestic inflation data later in the week.

Canada’s consumer price index report for March, due on

Wednesday, could help guide expectations for further tightening

from the Bank of Canada.

Last Wednesday, the central bank raised its benchmark

interest rate by half of a percentage point to 1%, its biggest

single hike in more than two decades, to try to limit inflation.

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The Federal Reserve is also expected to move aggressively to

tackle inflation, which helped push the US dollar

higher against a basket of major currencies.

Meanwhile, US crude oil futures settled 1.2% higher

at $108.21 a barrel as outages in Libya deepened concern over

tight global supply amid the Ukraine crisis.

The Canadian dollar was nearly unchanged at 1.2613 to

the greenback, or 79.28 US cents, after trading in a range of

1.2604 to 1.2644.

Activity in the foreign exchange market was lighter than

usual with a number of major financial centers closed for Easter


Speculators have raised their bullish bets on the Canadian

dollar to the highest in four weeks, data from the US

Commodity Futures Trading Commission showed on Friday.

The loonie has gained 0.2% since the beginning of the year,

trailing only the Australian dollar among G10 currencies.

Canadian government bond yields edged higher across the

curve. The 10-year touched its highest level since

January 2014 at 2.800% before dipping to 2.784%, up nearly 1

basis points on the day.

(Reporting by Fergal Smith; editing by Barbara Lewis)