Canadian dollar keeps pace with broadly stronger greenback

TORONTO: The Canadian dollar was little changed against its US counterpart on Monday, holding on to last week's gains as US fiscal stimulus moved a step closer to being passed and ahead of an interest rate decision by the Bank of Canada on Wednesday.

The US Senate on Saturday passed the stimulus package and President Joe Biden said he hoped for quick passage of the revised bill by the House of Representatives so he could sign it and send $1,400 direct payments to Americans.

Canada sends about 75% of its exports to the United States including oil.

US crude oil futures were down 1.2% at $65.31 a barrel, giving back some recent gains as US Treasury yields climbed. Higher yields boosted the appeal of the US dollar, which rose to a 3-1/2-month high against a basket of major currencies.

The Canadian dollar was trading nearly unchanged at 1.2659 to the greenback, or 79.00 US cents, having traded in a range of 1.2622 to 1.2699. Last week, it rose 0.7%.

Speculators have raised their bullish bets on the Canadian dollar to the highest in four weeks, data from the US Commodity Futures Trading Commission showed on Friday. As of March 2, net long positions had increased to 15,327 from 9,132 in the prior week.

Investors see rising chances that the Bank of Canada would hike interest rates next year as the economic outlook improves, but the central bank is likely to push back against those bets for now, pointing to still high unemployment, analysts say.

Canadian government bond yields were higher across much of a steeper curve in sympathy with US Treasuries. The 10-year touched its highest since January last year at 1.545% before dipping to 1.521%, up 1.9 basis points on the day.