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Canadian dollar near flat as oil dips, investors brace for jobs report

Published 2019-04-03, 04:15 p/m
© Reuters.  Canadian dollar near flat as oil dips, investors brace for jobs report
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* Loonie trades in a range of 1.3297 to 1.3353

* Price of U.S. oil falls 0.2%

* Canadian bond prices decline across steeper yield curve

By Fergal Smith

TORONTO, April 3 (Reuters) - The Canadian dollar was little changed against its broadly weaker U.S. counterpart on Wednesday as oil prices fell and investors turned cautious on the loonie ahead of Canadian jobs data due on Friday.

Blockbuster Canadian job gains this year have helped bolster investor sentiment for the loonie, offsetting other data showing a slowdown in Canada's economy.

The domestic job numbers have been volatile in recent months so now investors are bracing for disappointing data that could put "downward pressure" on the currency, said Alfonso Esparza, a senior currency analyst at OANDA.

The Bank of Canada is unlikely to cut interest rates to support a flagging economy as long as job growth continues at a robust pace, an analysis of the central bank's response to past divergences in economic data suggests. price of oil, one of Canada's major exports, dipped on Wednesday after U.S. government data showed a surprise build in crude inventories. crude oil futures CLc1 settled 0.2 percent lower at $62.46 a barrel, while the U.S. dollar declined against a basket of major currencies as encouraging Chinese data and hopes of a trade deal between the U.S. and China boosted risk appetite globally. 3:50 p.m. (1950 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3338 to the greenback, or 74.97 U.S. cents. The currency's strongest level of the session was 1.3297, matching Monday's 11-day high, while its weakest was 1.3353.

The only other G10 currencies not to advance against the U.S. dollar were the yen JPY= and the Swiss franc CHF= .

Lack of progress for the loonie came one day after Canadian Prime Minister Justin Trudeau sought to quell a crisis that threatens his chances of re-election, expelling from party ranks two former Cabinet members he said had undermined the ruling Liberals. government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 5 Canadian cents to yield 1.588% and the 10-year CA10YT=RR was down 30 Canadian cents to yield 1.702%.

Canada's 10-year yield rose 3.5 basis points further above the yield on the 3-month T-bill to reach a spread of 3.7 basis points, which could temper the recession concerns of some investors. curve inverted in March for the first time since 2007.

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