CANADA FX DEBT-Canadian dollar steadies as attention turns to U.S. inflation data

 (New throughout, updates prices, market activity and comments)
    * Loonie trades in a range of 1.2058 to 1.2118
    * Bank of Canada leaves key interest rate at 0.25%
    * Price of U.S. oil settles 0.1% lower
    * Canadian 10-year yield hits a near 3-month low

    By Fergal Smith
    TORONTO, June 9 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Wednesday, paring gains
as the Bank of Canada stayed on course to reduce stimulus
further over the coming months and as upcoming U.S. inflation
data drew attention.
    The Bank of Canada left unchanged its key interest rate at a
record low 0.25% and said it would maintain the pace of
quantitative easing, saying the economy would "rebound strongly"
as vaccinations against COVID-19 picked up.             
    "A further taper in QE is likely in July as the growth
outlook improves further and becomes more certain," said Ryan
Brecht, a senior economist at Action Economics.
    In April, the BoC became the first major central bank to cut
back on pandemic-era money-printing stimulus programs.
    The U.S. dollar        rose against a basket of major
currencies as investors focused on a European Central Bank
meeting and the U.S. consumer price index report, both due on
Thursday, to gauge the current pace of the economic recovery.
    The Canadian dollar          was trading nearly unchanged at
1.2113 to the greenback, or 82.56 U.S. cents, having traded in a
range of 1.2058 to 1.2118. Last week, it touched its strongest
level in six years at 1.2007, bolstered by soaring commodity
    The price of oil, one of Canada's major exports, slipped on
Wednesday after U.S. inventory data showed a surge in gasoline
inventories. U.S. crude        prices settled 0.1% lower at
$69.96 a barrel.              
    Canada took a cautious first step toward easing COVID-19
border restrictions, saying it was prepared to relax quarantine
protocols for fully vaccinated citizens returning home starting
in early July.             
    Canadian government bond yields were lower across a flatter
curve, tracking the move in U.S. Treasuries. The 10-year
            fell as much as 5 basis points to 1.403%, its lowest
level since March 11.

 (Reporting by Fergal Smith; Editing by Will Dunham, Jonathan
Oatis and David Gregorio)

Read More: CANADA FX DEBT-Canadian dollar steadies as attention turns to U.S. inflation data

2021-06-09 20:55:00

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