TORONTO: The Canadian dollar ended marginally weaker against the US currency on Monday with volumes stunted by the Easter holidays and by trepidation ahead of several central bank policy decisions due later in the week.
The next major domestic catalyst is likely to be a jobs report due out on Friday, and strategists will to look to stock markets and other major currencies to provide direction until then.
"Canada's got a really quiet week until the employment data on Friday," said David Bradley, a director of foreign exchange trading at Scotiabank.
"So we'll be to-ing and fro-ing based off what the equity markets do, and to some extent the commodities and how the (US) dollar in general trades," he said.
The Canadian dollar ended the day changing hands at C$1.0167 to the greenback, or 98.36 US cents, compared with C$1.0160, or 98.43 US cents, at Thursday's North American close.
The loonie, as Canada's currency is colloquially known, has traded between C$1.0140 and C$1.0200 in the past three sessions.
"It's a very quiet start to the week. There are lots of central banks meeting this week, which is contributing to the lack of interest at the moment," said Shaun Osborne, chief currency strategist at TD Securities.
The European Central Bank, the Bank of Japan, the Reserve Bank of Australia and the Bank of England are all due to make policy announcements this week, leaving currency strategists unwilling to make big bets before the news.
"The uncertainty that the situation currently is provoking has really curtailed interest in positioning ahead of the bank meetings," Osborne said.
Prices for Canadian government debt were higher across the curve, with the two-year bond up 2 Canadian cents to yield 0.994 percent, and the benchmark 10-year bond rising 25 Canadian cents to yield 1.849 percent.
Scotia's Bradley said that the loonie would likely not strengthen much more after a recent rally and that soft upcoming data could push it toward C$1.0225, a level that could prompt further selling to pressure the currency towards C$1.0350.
Canada's Friday's employment report, coupled with similar data out of the United States on the same day, will illustrate the extent to which businesses are hiring as the two economies try to recover.
Canadian employment data is expected to show the economy added just 8,500 net new jobs in March, well down from the higher-than-expected 50,700 added in February. The unemployment rate is seen unchanged at 7.1 percent.
Canada recently experienced a burst of outsized job growth, with an average of 29,000 jobs created per month over the past six months. But economists have warned the pace of new hiring will decline given slowing economic growth, a cooling property market and record high household debt levels.
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