TORONTO: The Canadian dollar was stronger against its US counterpart in early trade on Monday on a minor greenback retreat but was seen clinging quite closely to its neighbor in a tight range.
The US dollar has in recent weeks broadly gained as yields spike in anticipation of a reduction in monetary stimulus, with the Canadian currency managing to stick with the greenback and gain against some other currencies.
The Japanese yen gained against both North American currencies after the country's prime minister won a decisive electoral victory that could herald more political stability.
"Canada's had a decent little run. When the (US) dollar was really rallying it hung in there quite well," said Darcy Browne, managing director of foreign exchange sales at CIBC World Markets.
"Overall, the Canadian dollar still stands to benefit from its proximity to the US, (but) it's a low-beta currency in good times and bad times."
At 9:18 a.m. (1318 GMT) the Canadian dollar was trading at C$1.0353 to the greenback, or 96.59 US cents, compared with C$1.0367, or 96.46 US cents, at Friday's North American close.
Browne said the loonie, as the Canadian currency is colloquially known, would likely not strengthen beyond C$1.0310 nor weaken past C$1.04 during the session, and that trade would remain subdued all week given a dearth of data releases.
"I would imagine we're just going to be on the ebbs and flows of risk and dollar-mania throughout the course of the week," he said.
The price of Canadian government debt was higher across the curve, though the rise was marginally at the short end.
The two-year bond was up 0.3 of a Canadian cent to yield 1.085 percent, while the benchmark 10-year bond rose 8 Canadian cents to yield 2.351 percent.
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