Canadian dollar dips as greenback notches broad-based gains
TORONTO, May 28 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as recent U.S. economic data bolstered the appeal of the American currency and ahead of domestic GDP data that could guide expectations for the Bank of Canada policy decision.
The loonie was trading 0.2% lower at 1.3830 per U.S. dollar, or 72.31 U.S. cents, extending its pullback from a seven-month high on Monday at 1.3684.
"It's a U.S. dollar story - the U.S. dollar is outperforming across the board," said Rahim Madhavji, president at KnightsbridgeFX.com. "The U.S. economy is potentially doing better than some had expected."
Data on Tuesday showed that U.S. consumer confidence improved in May after deteriorating for five straight months amid a truce in the trade war between Washington and China.
"All eyes are looking towards the GDP data on Friday in Canada, which will obviously be a key indicator for the Bank of Canada," Madhavji said.
Canadian gross domestic product data, due on Friday, is expected to show that the economy grew at an annualized rate of 1.7% in the first quarter, down from 2.6% in the previous quarter.
Investors expect the BoC to leave its benchmark interest rate on hold at 2.75% at a policy decision meeting next Wednesday after recent domestic data showed underlying inflation heating up in April.
The central bank paused its easing campaign last month for the first time since it began cutting rates in June.
The price of oil, one of Canada's major exports, settled 1.6% higher at $61.84 a barrel as OPEC+ agreed to leave its output policy unchanged and the U.S. barred Chevron CVX.N from exporting Venezuelan crude.
The Canadian 10-year yield eased half a basis point to 3.252%, while it was trading 5.1 basis points further below the equivalent U.S. rate at a gap of nearly 123 basis points.
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