Loonie is trading in a range of 1.4350 to 1.4433
The Canadian economy grows by 0.3% in October
The ten-year interest rate rises by 1.8 basis points
TORONTO, Dec 23 (Reuters) – The Canadian dollar held steady against the U.S. dollar on Monday, reversing its earlier declines, as investors weighed both domestic GDP data and the minutes of the Bank of Canada’s latest meeting, which showed that some members were in favor of a lower interest rate cut.
The loonie was trading virtually unchanged at 1.4375 per U.S. dollar, or 69.57 U.S. cents, after trading in a range of 1.4350 to 1.4433.
The Bank of Canada’s decision to cut rates by 50 basis points on Dec. 11 was a close call, with some board members suggesting a 25 basis point cut was more appropriate, the minutes showed.
“We continue to expect Canadian central bankers to cut rates by another 25 basis points in January and then pause in March to assess how the economy responds to lower rates,” Tiago Figueiredo, macro strategist at Desjardins, said in a note .
Investors are anticipating a easing of roughly 13 basis points for the central bank’s next policy decision on January 29, which corresponds to a 52% chance of a 25 basis point cut.
Canada’s economy beat market expectations with 0.3% growth in October, led by increases in oil and gas exploration and production, but gross domestic product likely contracted in November.
On Thursday, the loonie hit its weakest intraday level since March 2020 at 1.4467. It has lately had to deal with the threat of US trade tariffs, an aggressive shift from the Federal Reserve and domestic political uncertainty.
Canadian Prime Minister Justin Trudeau is under increasing pressure from his own lawmakers to resign and let someone else take over.
The US dollar resumed its upward trajectory against a basket of major currencies, while US Treasury yields rose.
The Canadian ten-year yield rose by 1.8 basis points to 3.295%. (Reporting by Fergal Smith; Editing by Chris Reese)
