TORONTO: The Canadian dollar rose modestly against the US dollar on Monday, as the markets eyed major events later this week to drive further direction.
The currency tracked global stocks, which edged higher as hopes of further stimulus moves from central banks supported markets.
"It's just one of those days where nothing's moving dramatically ... People are trying to take some cues from the whole thought of QE3 for the US," said Don Mikolich, executive director of foreign exchange sales at CIBC World Market.
At 3:37 p.m. EDT (1937 GMT) the Canadian dollar traded at C$0.9906 against the US dollar, or $1.0095, firmer than Friday's North American close at C$0.9916, or $1.0085.
The currency traded in a tight range and volumes, already seasonally light, were particularly thin on Monday due to the summer bank holiday in Britain.
"Canada does seem somewhat comfortable in this C$0.99 range," said Mikolich.
"If there's a breakout, it's probably to the upside back above par because we've had some undesirable developments in Europe that have people fleeing to the safety of the US dollar," said Mikolich.
Friday's meeting of central bankers from around the world in Jackson Hole, Wyoming will kick off a busy September that will see a number of key meetings, events and data that could drive direction for the Canadian dollar.
The annual meeting, hosted by the Kansas City Fed, could hint at the US central bank's monetary policy to come. Markets will be looking for clues as to when Chairman Ben Bernanke may unleash a third round of bond purchases to spur the sputtering US recovery.
Also in focus will be Friday's Canadian gross domestic product figures, which are expected to soft.
"In Canada, domestic demand (has been) shouldering the burden for the economic growth in the country and that's expected to remain the case," said Mazen Issa, macro strategist with TD Securities, adding that exports were expected to drag on growth.
"A lot of data over the course of the quarter suggested that business investment is not going to be particularly strong. That's associated with the heightened global uncertainty."
Canadian bond prices were mixed, with the two-year bond down half a Canadian cent to yield 1.155 percent and the benchmark 10-year bond up 39 Canadian cents to yield 1.791 percent.
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