Canadian dollar dips against broadly stronger greenback

TORONTO: The Canadian dollar weakened against its US counterpart on Monday as the greenback broadly climbed, with the currency giving back some gains it made after stronger than expected GDP data on Friday.

The Canadian dollar was trading 0.2% lower at 1.2805 to the greenback, or 78.09 US cents, having traded in a range of 1.2761 to 1.2819.

The US dollar rose against a basket of major currencies, bolstered by pressure on the Swiss franc, which fell out of recent trading ranges against the greenback.

The price of oil, one of Canada's major exports, was buoyed by falling inventories and hopes of a swifter global economic recovery, although halting vaccine rollouts and renewed travel restrictions capped gains. US crude prices were up 1.1% at $52.76 a barrel.

Canada's economic growth outpaced expectations in November, posting a seventh consecutive monthly gain, while a surge in COVID-19 and fresh lockdowns likely slowed growth in December, data from Statistics Canada showed on Friday.

"The report has prompted speculation that the BoC may have to withdraw stimulus sooner than expected," FX strategists at Scotiabank, including Shaun Osborne, said in a note.

Scotiabank forecasts no interest rate hikes before 2023.

Canada's employment report for January is due on Friday, which could help guide interest rate expectations.

Canadian government bond yields edged higher across the curve, with the 10-year up 1 basis point at 0.899%.

US Treasury Secretary Janet Yellen and her Canadian counterpart on Friday underscored the importance of working closely together on economic policy, national security and climate change, the governments said in separate statements.