Canadian dollar hits 4-week low ahead of BoC rate decision

TORONTO: The Canadian dollar weakened to a nearly four-week low against its US counterpart on Tuesday as the greenback broadly climbed and as investors awaited a Bank of Canada interest rate decision on Wednesday.

The US dollar rose against a basket of major currencies, supported by this month's rise in US bond yields.

The Bank of Canada is expected to hold its benchmark interest rate steady at 1.75% on Wednesday and for the rest of this year, with calls for the next hike in early 2020 resting on a knife's edge, a Reuters poll showed.

At 9:12 a.m. (1312 GMT), the Canadian dollar was trading 0.4% lower at 1.3399 to the greenback, or 74.63 US cents. The currency touched its weakest since March 29 at 1.3413.

The decline for the loonie came despite a nearly six-month high for the price of oil, one of Canada's major exports, after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran.

US crude prices were up 0.3% at $65.77 a barrel.

Canadian wholesale trade increased by 0.3 percent in February from January on stronger sales in the motor vehicle and parts subsector, Statistics Canada said. Analysts surveyed by Reuters had forecast a 0.1 percent increase.

Canadian government bond prices edged higher across the yield curve in sympathy with US Treasuries. The two-year was up 1.5 Canadian cents to yield 1.612% and the 10-year gained 2 Canadian cents to yield 1.785%.