Written by Fergal Smith
TORONTO (Reuters) – The Canadian dollar was little changed against the U.S. dollar on Monday, buoyed by recent losses as oil prices rose and traders awaited domestic inflation data for clues on the prospects for a rate cut. The brakes were put on hold.
After hitting a nine-day low of $1.3551 on Friday, the Madness was trading little changed at 1.3535 cents (73.88 US cents) to the dollar.
“A rebound in U.S. equities and solid WTI oil prices have helped stem last week's decline in the Canadian dollar, and the market is looking forward to tomorrow's February Canadian Consumer Price Index,” said George Davis, chief technical strategist at RBC Capital. There is a high possibility that the economy will remain stuck until the CPI is announced.” market.
Oil prices, one of Canada's main exports, rose to a four-month high on lower oil exports from Iraq and Saudi Arabia, as well as signs of increased demand and economic growth in China and the United States. US crude oil futures rose 2.1% to $82.72 per barrel.
Canadian consumer price index statistics for February to be released on Tuesday show inflation is expected to rise to 3.1 per cent from January's annual rate of 2.9 per cent.
Earlier this month, the Bank of Canada kept its benchmark interest rate unchanged at 5%, the highest level in 22 years, saying underlying inflation was too high to consider easing.
Data on Monday showed Canadian home sales fell 3.1 per cent in February after strong growth over the past two months, but prices stabilized after five straight months of declines.
Housing Minister Sean Fraser said Canada's federal budget is likely to allocate billions of dollars to invest in home construction and affordable housing programs.
Canadian bond yields tracked U.S. bond yields, rising across the curve. The 10-year yield rose 5.6 basis points to 3.603%, its highest level since February 16th.
(Reporting by Fergal Smith in Toronto; Editing by Nia Williams)