TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as the greenback broadly climbed, but the loonie stuck within its recent trading range ahead of the expected signing this week of a trade deal between the United States and China.
At 8:51 a.m. (1351 GMT), the Canadian dollar was trading 0.1% lower at 1.3071 to the U.S. unit, or 76.51 U.S. cents. The currency, which last Thursday hit a near two-week low at 1.3104, traded in a range of 1.3051 to 1.3080.
A Chinese delegation arrived in Washington ahead of Wednesday's scheduled signing of a Phase 1 trade agreement, seen as likely calming a dispute that has upended the world economy.
Canada is a major producer of commodities, including oil, so its economy could benefit from an improved outlook for global trade.
U.S. crude oil futures (CLc1) rose nearly 1% to $58.64 a barrel, snapping four straight days of declines on easing Mideast tensions, while the U.S. dollar gained ground against a basket of major currencies.
On Monday, a quarterly business survey from the Bank of Canada showed that sentiment was "broadly positive," cementing expectations for the Bank of Canada to leave its benchmark interest rate on hold next week at 1.75%.
The central bank has stayed on the sidelines since October 2018 even as some other major central banks, such as the Federal Reserve and the European Central Bank, have eased. The Bank of Canada's stance has helped support the loonie, which was the top-performing G10 currency in 2019 with a gain of 5%.
Canadian government bond prices were higher across a flatter yield curve on Tuesday in sympathy with U.S. Treasuries as U.S. data showed that consumer prices rose moderately in December.
The two-year (CA2YT=RR) rose 1.5 Canadian cents to yield 1.661% and the 10-year (CA10YT=RR) was up 14 Canadian cents to yield 1.595%.