CANADA FX DEBT-Canadian dollar steadies as investors turn focus to domestic inflation data
By Fergal Smith
TORONTO, July 14 (Reuters) - The Canadian dollar was largely flat against its U.S. counterpart on Monday as recent domestic jobs data offset trade uncertainty and investors awaited an inflation report seen as key to the Bank of Canada's upcoming interest rate decision.
The loonie CAD= was trading nearly unchanged at 1.3693 per U.S. dollar, or 73.03 U.S. cents, after moving in a range of 1.3671 to 1.3716. On Friday, the currency touched a two-week low at 1.3731.
Canada's economy added many more jobs than expected in June, data on Friday showed, raising expectations the BoC will leave its benchmark interest rate on hold at 2.75% on July 30. Investors see a 13% chance of a rate cut, down from 27% before the data.
"A very large upside surprise from the jobs data on Friday is helping to fend off any downside pressure stemming from U.S. tariff threats – making for some choppy but largely directionless trading," strategists at Monex Europe, including Nick Rees, said in a note.
"CPI tomorrow is the major Canadian release of note this week, albeit one that is likely to be overshadowed by a counterpart release in the U.S."
Canada's Consumer Price Index report for June is expected to show the annual rate of inflation rose to 1.9% from 1.7% in May.
U.S. inflation data is also due on Tuesday.
Data on Monday showed that wholesale trade rose 0.1% in May from April, eclipsing expectations for a 0.4% decline.
The U.S. dollar .DXY advanced against a basket of major currencies after U.S. President Donald Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the European Union. On Thursday, Trump threatened to impose a 35% tariff on Canadian imports, but an exclusion for goods covered by a continental trade pact was expected to stay in place.
Canadian bond yields moved higher across a steeper curve. The 10-year CA10YT=RR was up 2.2 basis points at 3.524%, after earlier touching its highest level since January 15 at 3.542%.
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