TORONTO: The Canadian dollar edged lower against its US counterpart on Friday as oil prices fell on signs of progress toward a peace deal in the Middle East, with the currency adding to its weekly decline.
The loonie was trading 0.1 percent lower at 1.3975 per US dollar, or 71.56 US cents, after moving in a range of 1.3959 to 1.3995.
On Thursday, the currency touched its weakest level since November at 1.4023, while it was down 0.3 percent since the start of the week.
The Bank of Canada on Wednesday left its benchmark interest rate unchanged at 2.25 percent for a fifth straight time and said it was seeing limited evidence that higher energy prices were fueling broad-based inflation.
Investors were pricing in 24 basis points of tightening by the end of the year from the BoC, down from 37 basis points before Wednesday’s rate decision, swap market data showed.
“The dovish communications from the Bank of Canada this week, as well as hopes that a US-Iran peace deal is just round the corner, suggest the Bank of Canada will keep interest rates unchanged this year,” Stephen Brown, chief North America economist at Capital Economics, said in a note.
The US dollar was little changed against a basket of major currencies after sliding the previous day, as traders awaited confirmation that a deal in the Middle East could be imminent.
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