TORONTO: The Canadian dollar weakened slightly against its US counterpart on Monday as crude oil slipped back below $40 a barrel and investors braced for policy decisions from the US Federal Reserve and other central banks.
At 8:50 a.m. EST (1250 GMT), the Canadian dollar was trading at C$1.3239 to the greenback, or 75.53 US cents, weaker than the Bank of Canada's official close on Friday of C$1.3231, or 75.58 US cents.
The currency's strongest level of the session was C$1.3213, while its weakest level was C$1.3279.
Canadian home prices rose in February from a month earlier, and were well up from the year before, the Teranet-National Bank Composite House Price Index showed.
Oil fell around 3 percent after Iran dashed hopes of a coordinated production freeze any time soon, returning bearish sentiment to the market over a supply glut that has sent prices crashing.
The Bank of Japan, the Fed, the Bank of England and the Swiss National Bank will all update their policies this week, after the European Central Bank last week cut interest rates, extended its asset-purchase program and pledged new cheap loans for banks.
The Canadian dollar, which has appreciated significantly since a Bank of Canada decision in January to hold rates steady rather than cut, could face pressure if the Fed reaffirms a hiking bias on Wednesday.
Canadian government bond prices were higher across the maturity curve, with the two-year price up 1.5 Canadian cents to yield 0.585 percent and the benchmark 10-year rising 17 Canadian cents to yield 1.344 percent.
The Canada-US two-year bond spread was -37.5 basis points, while the 10-year spread was -61.9 basis points.
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