Canadian dollar steadies ahead of Macklem speech, as oil falls

TORONTO: The Canadian dollar was little changed against its broadly weaker US counterpart on Thursday as oil prices fell, with the loonie steadying ahead of a speech by Bank of Canada Governor Tiff Macklem.

The price of oil, one of Canada's major exports, was lower after data showed US crude stockpiles rose last week and the US Energy Information Administration reduced its demand outlook. US crude prices were down 2% at $37.28 a barrel.

The US dollar lost ground against a basket of major currencies after comments by European Central Bank President Christine Lagarde boosted the euro.

The Canadian dollar was trading nearly unchanged at 1.3139 to the greenback, or 76.11 US cents. The currency, which hit on Wednesday a three-week low at 1.3259, traded in a range of 1.3130 to 1.3168.

Macklem will speak via video conference to a business audience at 12:30 p.m. (1630 GMT). On Wednesday, the BoC held its key interest rate steady at 0.25% but left the door open on possible future changes to its quantitative easing program.

With COVID-19 cases in Canada on the rise again and children returning to schools across the country, Prime Minister Justin Trudeau on Wednesday urged people to be careful in order to avoid new major outbreaks.

Canadian government bond yields edged higher across the curve on Thursday, with the 10-year up 0.3 basis points at 0.599%.

The gap between the Province of Saskatchewan's 10-year yield and the yield on the equivalent maturity Government of Canada bond was little changed at about 80 basis points after Moody's Investors Service changed the outlook on the province's triple A debt rating to negative from stable due to uncertainty related to the coronavirus pandemic and weaker commodity prices.

Saskatchewan's economy is heavily reliant on oil, gas and potash revenues.