TORONTO: The Canadian dollar edged higher against its US counterpart on Tuesday, as stronger-than-expected domestic economic growth in February offset a drop in oil prices and broader gains for the greenback.
The Canadian economy grew 0.4 percent in February, Statistics Canada said, a sign that first-quarter growth could be stronger than the Bank of Canada is predicting. Analysts had forecast February gross domestic product would increase by 0.3 percent.
The Bank of Canada has hiked interest rates three times since July. But recent comments by central bank officials have been seen as dovish by some investors.
Chances of a hike at the May 30 interest rate announcement have been dialed back to about 25 percent from nearly 50 percent in mid-April, data from the overnight index swaps market showed.
Bank of Canada Governor Stephen Poloz will give a speech on Tuesday to the Yellowknife Chamber of Commerce. The central bank will release his prepared remarks at 2:30 p.m. EDT (1830 GMT).
The price of oil, one of Canada's major exports, slid as the US dollar remained near a four-month high.
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