TORONTO: The Canadian dollar edged lower against its US counterpart on Tuesday as oil prices fell, but the currency traded in a narrow range as stocks rose and ahead of domestic jobs data due at the end of the week.
The price of oil, one of Canada's major exports, fell a day after a report showing a decline in US factory orders dragged major benchmarks down from 2019 highs. US crude oil futures were down 1.1 percent at $53.94 a barrel.
Europe's miners and banks helped world stocks extend a white hot start to the year, while the dollar strained for a fourth day of gains as traders awaited US President Donald Trump's State of the Union address.
At 9:06 a.m. EST (1406 GMT), the Canadian dollar traded 0.1 percent lower at 1.3120 to the greenback, or 76.22 US cents. The currency, which on Friday touched its strongest intraday level in nearly three months at 1.3069, traded in a range of 1.3102 to 1.3130.
The narrow range for the loonie came ahead of Friday's release of Canada's employment report for January, which could help guide expectations for additional interest rate hikes from the Bank of Canada.
Money markets expect the Bank of Canada to keep rates on hold over the coming months after the central bank said in January that low oil prices, which have led to production cuts in Alberta, and a weak housing market harmed the economy in the fourth quarter of 2018 and will continue to do so in the first quarter of this year.
Canada's main financial regulator is coming under increasing pressure from banks and mortgage industry lobbyists to ease a stress test designed to cut risky lending, but the agency is expected to hold off on changing the rules, three sources with direct knowledge of the matter told Reuters.
Canadian government bond prices were slightly higher across much of the yield curve, with the 10-year rising 4 Canadian cents to yield 1.959 percent.
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