TORONTO: The Canadian dollar firmed against a broadly weaker US dollar, but trimmed some gains as crude oil prices fell after earlier advancing and Canadian wholesale trade dipped unexpectedly in September.
Supportive of global asset markets but weighing on the US dollar, the Federal Reserve has signaled a likely rate increase next month, but also that it would proceed gradually on further hikes depending on the economy's performance.
Canadian wholesale trade fell by 0.1 percent in September from August, led by the motor vehicle and building supplies sectors, data from Statistics Canada showed on Thursday. That compares with an expected 0.3 percent gain in a Reuters poll.
At 8:38 a.m. EST (1338 GMT), the Canadian dollar was trading at C$1.3292 to the greenback, or 75.23 US cents, stronger than the Bank of Canada's official close on Wednesday of C$1.3318, or 75.09 US cents.
The currency's strongest level of the session was C$1.3247, while its weakest was C$1.3314.
US crude prices were down 1.64 percent to $40.08, while Brent crude lost 0.75 percent to $43.81.
Canadian government bond prices were slightly higher across the maturity curve, with the two-year price up 0.5 Canadian cent to yield 0.637 percent and the benchmark 10-year rising 7 Canadian cents to yield 1.642 percent.
The curve flattened in sympathy with US Treasuries, as the spread between the 2-year and 10-year yields narrowed by 0.5 of a basis point to 100.8 basis points, indicating outperformance for longer-dated maturities.
The Canada-US two-year bond spread was 2 basis points wider at -25.8 basis points as Treasuries underperformed at the front of the curve, while the 10-year spread was 0.7 of a basis point narrower at -61.2 basis points.
The Bank of Canada will release the autumn issue of the Bank of Canada Review at 10:30 a.m. EST (1530 GMT), featuring articles related to the Canadian economy and to central banking.
Details of next week's Government of Canada 30-year auction will be announced today.
The market will also be bracing for October CPI and September retail sales data, due to be released on Friday.
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