TORONTO: The Canadian dollar was flat and trading in a tight range against the US dollar in early trade on Thursday as investors awaited a Bank of Canada report on Canada's financial stability that will focus on Canada housing and consumer debt.
The Bank of Canada will publish its Financial System Review at 10:30 a.m. (1430 GMT), rating how it sees various risks - from domestic debt to international factors - to Canada's financial system, and Governor Stephen Poloz will hold a press conference after the report is released.
In December, the central bank downgraded the overall risk to elevated from high, saying the risk from high household debt and the housing market remained elevated and constituted the biggest domestic risk to financial stability.
"It is new to have a press conference on this publication, and so I think there is some market anticipation of how (Poloz)plans to proceed," said Camilla Sutton, chief currency strategist at Scotiabank.
"We're likely to see that household debt and housing issue come up, as well as the impact of low global interest rates and any other international factors that could be providing some financial stability risk in Canada," she added.
At 9:54 a.m. (1354 GMT) the Canadian dollar was at C$1.0857 versus the greenback, of 92.11 US cents, slightly stronger than Wednesday's close at C$1.0867 versus the greenback, or 92.02 US cents.
In setting interest rates, the central bank has had to weigh the debt and housing risks against low inflation. In a sign the central bank is giving more importance to this assessment of risks, Poloz and Senior Deputy Governor Carolyn Wilkins will further elaborate on the report in a news conference.
Canadian government bond prices were marginally higher across the maturity curve, with the two-year up 0.3 Canadian cent to yield 1.078 percent and the benchmark 10-year rising 6 Canadian cents to yield 2.341 percent.
Comments
Comments are closed for this article.