TORONTO: The Canadian dollar was little changed against the greenback on Wednesday, hampered by broad strength for the US dollar and as investors were looking ahead to domestic inflation data at the end of the week.
The loonie saw little reaction to a report that showed Canadian wholesale trade rose more than expected in June and the volume of sales grew as well.
Without any more domestic catalysts on tap until Friday, the Canadian dollar was left consolidating around the mid-C$1.09 area after a sharp drop in the previous session.
Despite some day-to-day swings, the loonie has largely traded within a range since the end of July. Analysts expect the currency to see further weakness before long as optimism over the US economic recovery should prompt investors to continue to favor the greenback.
"It looks like the long awaited rebound in the US dollar is underway and that's probably going to be the biggest factor behind weakness in the Canadian dollar," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada in Toronto.
The Canadian dollar was at C$1.0942 to the greenback, or 91.39 US cents, nearly flat to Tuesday's close of C$1.0943, or 91.38 US cents.
Markets will be watching later in the day for the release of the minutes from the US Federal Reserve's most recent policy meeting. Focus is also on the meeting of policymakers and economists in Jackson Hole, Wyoming, at the end of the week, with Fed Chair Janet Yellen due to give a speech on Friday.
At home, investors will get a look at Canadian inflation and retail sales reports on Friday, which are seen as the biggest potential domestic market movers of the week.
Canadian government bond prices were mostly lower across the maturity curve, with the two-year off half a Canadian cent to yield 1.076 percent, though the benchmark 10-year was up 2 Canadian cents to yield 2.074 percent.
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