TORONTO: The Canadian dollar was little changed against the greenback on Wednesday as a lack of domestic economic data left the currency without much direction, though an overall improvement in market risk appetite gave the loonie some support.
Worries over geopolitical tensions eased as US President Barack Obama and leaders of the Group of Seven major industrialized nations agreed this week to hold off on tougher economic sanctions against Russia unless President Vladimir Putin takes further action to destabilize Ukraine or other former Soviet republics.
The brightening of sentiment helped the loonie continue to consolidate after it fell to a 4-1/2 year low last week.
"From a broad perspective, it's a little bit of an uptick in the loonie. It's really driven by a small gain in risk appetite," said Rahim Madhavji, president at KnightsbridgeFX.com in Toronto.
With no major economic data on the calendar until next week, analysts said the Canadian dollar is likely to be confined to a tight range.
"There's no catalyst for the loonie in the near term, so we're still expecting to see a lack of momentum in the short term and a lot of range-bound trading," Madhavji said.
The Canadian dollar was at C$1.1167 to the greenback, or 89.55 US cents, slightly weaker than Tuesday's close of C$1.1159, or 89.61 US cents.
The loonie had been stronger in overnight trade, but those gains dwindled in morning action. It had risen alongside other growth and commodity currencies, including the Australian dollar, after Australia's top central banker played down the risk of a sustained rise in domestic inflationary pressures.
Reserve Bank of Australia Governor Glenn Stevens did not make any mention in his speech of the Australian dollar being too strong, but he later said he expects the currency to weaken.
Canadian government bond prices were mostly higher across the maturity curve, though the two-year was unchanged to yield 1.069 percent. The benchmark 10-year was up 16 Canadian cents to yield 2.464 percent.
Comments
Comments are closed for this article.