Canadian dollar outperforms most G10 currencies ahead of BoC rate decision
TORONTO, June 3 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday but was performing better than all the other Group of 10 currencies, as oil prices rose and investors awaited a Bank of Canada interest rate decision this week.
The loonie was trading 0.1% lower at 1.3725 per U.S. dollar, or 72.86 U.S. cents, after trading in a range of 1.3702 to 1.3742.
All the other G10 currencies posted bigger declines as the U.S. dollar (.DXY), opens new tab clawed back some of its recent broad-based losses.
"With the BoC meeting ahead, investors are watching Governor (Tiff) Macklem for signals on rate cuts," said Kevin Ford, FX & macro strategist at Convera. "Sticky core inflation and an OK Q1 GDP have tempered expectations for further easing."
The Canadian central bank will hold its benchmark interest rate at 2.75% on Wednesday as policymakers await further news on an economy that grew faster than expected last quarter, with at least two more cuts likely this year, according to a majority of economists in a Reuters poll.
Overnight index swaps are pricing in a roughly 75% chance the BoC stays sidelined on Wednesday. The central bank left rates on hold in April for the first time since its easing campaign began in June last year.
The price of oil , one of Canada's major exports, rose as the war in Ukraine ramped up and Iran was a U.S. nuclear deal proposal. U.S. crude oil futures were trading 1.7% higher at $63.58 a barrel.
Wildfires burning in Canada's oil-producing province of Alberta have affected more than 344,000 barrels per day of oil sands production, or about 7% of the country's overall crude oil output, according to Reuters calculations.
Canadian bond yields rose across a steeper curve, with the 10-year up 4.4 basis points at 3.270%.
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