June 19, 2024
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Loonie trades in the range of 1.3690 to 1.3749

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Recession bets reach highest level since June 2017

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US oil price increased by 2.25%

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10-year yield drops 2.5 basis points

by fergal smith

TORONTO, Nov 20 (Reuters) – The Canadian dollar was little changed against its broadly weaker U.S. counterpart on Monday, as speculators added to their short positions in the currency ahead of domestic inflation data that kept the Bank of Canada on edge. Can keep.

The loonie was trading almost unchanged at 1.3720 per greenback, or 72.88 US cents, after trading in a range of 1.3690 to 1.3749.

It was the only G10 currency not to gain against the US dollar as investors believed the US Federal Reserve had ended its interest rate hike cycle.

“We are in a holding pattern because of the big CPI report coming tomorrow,” said Eric Breger, director of FX and precious metals risk management at Silver Gold Bull.

Breger said the currency “may not find a bid” despite positive factors such as low US bond yields and higher oil prices. The price of oil, one of Canada’s key exports, rose 2.25% to close at $77.60 a barrel.

Tuesday’s data is expected to show that Canadian inflation slowed to an annual pace of 3.2% in October from 3.8% in September.

Currency markets expect the BoC to leave its benchmark interest rate at a 22-year high of 5% in December before cutting rates in April.

Canada’s economy has been in recession and the recession could get worse now that the period of rapid growth in the United States is expected to end.

Data from the US Commodity Futures Trading Commission on Friday showed speculators increased their bearish bets on the Canadian dollar by the most since June 2017. By November 14, the net short position had increased to 70,403 contracts, up from 67,721 the previous week.

Canadian 10-year yields eased 2.5 basis points to 3.659%, trading near their lowest in two months. (Reporting by Fergal Smith; Editing by Cynthia Osterman)

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