TORONTO: The Canadian dollar steadied against the greenback on Thursday after hitting a nearly two-week low earlier in the session as investors weighed chances of a Bank of Canada interest rate hike next week and worried about a US withdrawal from NAFTA.
At 9:20 a.m. EST (1420 GMT), the Canadian dollar was little changed at C$1.2549 to the greenback, or 79.69 US cents. The currency touched its weakest level since Dec. 29 at C$1.2590.
The United States must be taken seriously when it says it might walk away from the North American Free Trade Agreement, Canada's foreign minister said, a day after government sources said Ottawa was increasingly convinced US President Donald Trump would pull the plug on the trade pact.
Chances of an interest rate hike next week, which had climbed on recent strong employment figures, have slipped to around 70 percent from nearly 90 percent on Monday, data from the overnight index swaps market showed.
The price of oil, one of Canada's major exports, reached multiyear highs despite warnings that a 13 percent rally since early December was close to running its course.
US crude was up 0.41 percent at $63.83 a barrel.
The US dollar fell against a basket of major currencies after the European Central Bank said it could revisit its policy message in early 2018, boosting the euro.
Canadian new home prices edged up 0.1 percent in November from October, boosted by gains in Ottawa, data from Statistics Canada showed. Prices were unchanged in a number of other markets, including the major city of Toronto.
Canadian government bond prices were mixed across a steeper yield curve, with the two-year up 0.1 Canadian cent to yield 1.763 percent and the 10-year falling 16 Canadian cents to yield 2.184 percent.
On Wednesday, the 10-year yield reached its highest intraday since September 2014 at 2.231 percent.
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