C$ clings to last week's gains ahead of federal budget

TORONTO: The Canadian dollar was little changed against its US counterpart on Monday, trading in a narrow range ahead of Tuesday's federal budget as oil prices rose and investors bet that the US Federal Reserve will strike a dovish tone this week.

At 9:07 a.m. (1307 GMT), the Canadian dollar was trading nearly unchanged at 1.3333 to the greenback, or 75.00 US cents. The currency, which advanced 0.6 percent last week, traded in a range of 1.3304 to 1.3344.

The US dollar declined against a basket of major currencies ahead of the Fed interest rate decision on Wednesday. Traders expect there will be no Fed rate hikes this year, and are even building in bets for a rate cut in 2020.

The price of oil, one of Canada's major exports, was supported by the prospect of prolonged OPEC-led oil supply curbs though concern that an economic downturn may dent fuel consumption curbed gains.

US crude oil futures were up 0.2 percent at $58.63 a barrel.

With a federal election looming and Prime Minister Justin Trudeau's government facing its worst political crisis in four years, Canada's ruling Liberals are expected to table a goody-filled budget in a bid to get back on course with voters.

Foreign investors bought a net C$28.40 billion ($21.29 billion) in Canadian securities in January, led by federal government bonds, following a revised C$20.49 billion total divestment in December, Statistics Canada said on Monday.

Canada's inflation report for February and January retail sales data are due on Friday.

Canadian government bond prices were lower across the yield curve on Monday, with the two-year down 1.5 Canadian cents to yield 1.631 percent and the 10-year falling 13 Canadian cents to yield 1.731 percent.

On Friday, the 10-year yield touched its lowest since June 2017 at 1.704 percent.