TORONTO: The Canadian dollar ended slightly higher against its US counterpart on Monday, rising from a 21-month low last week as US dollar investors trimmed their positions after a strong run since mid-June.
However, a Bank of Canada survey, released on Monday, showing businesses remain wary of Canada's sluggish economy didn't alter the perception that the Canadian dollar will continue to lose ground, particularly as the US Federal Reserve signals its intention to scale back stimulus measures.
The currency ended at C$1.0560 to the US dollar, or 94.70 US cents, slightly stronger than Friday's North American session close of C$1.0567, or 94.63 US cents.
The Canadian dollar has been on a fairly steady decline since mid-June and hit its lowest level in 21 months on Friday after strong US jobs data bolstered the greenback.
"We're looking a little bit overextended after the (US dollar) move up we've seen...so I wouldn't be at all surprised to see a little bit of consolidation," said Shaun Osborne, chief currency strategist at TD Securities.
Osborne said the Canadian currency could stage a mild rebound against the US dollar in the short term, but that its longer-term direction is lower.
The US dollar was generally weaker against major currencies on Monday.
Prices for Canadian government debt were higher across the curve. The two-year bond was up 13 Canadian cents to yield 1.165 percent. The benchmark 10-year bond was up 61 Canadian cents to yield 2.479 percent.
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