TORONTO (Reuters) - The Canadian dollar was little changed against a broadly stronger U.S. counterpart on Monday, with the currency holding on to its gains for the month after it had been supported by the Bank of Canada’s divergence from other central banks.
At 4:22 p.m. (2022 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3243 to the greenback, or 75.51 U.S. cents, faring better than other G10 currencies with the exception of sterling.
The range for the loonie was 1.3225 to 1.3260. For the month, it was up 0.5%.
“It is the second cleanest shirt in the dirty laundry basket after the U.S.,” said Christian Lawrence, senior market strategist at Rabobank. “The Bank of Canada is resisting rate cuts for now while everyone else is talking about more easing.”
A steady policy stance from the Bank of Canada this year has been supported by a robust domestic jobs market and an inflation rate that has hovered around the central bank’s 2% target. Other central banks, including the U.S. Federal Reserve have eased.
Relative strength for the loonie on Monday came as Canadian Prime Minister Justin Trudeau’s Liberal Party promised billions of dollars of new spending in a campaign platform ahead of next month’s federal vote.
Deficits add to a country’s debt load but could also boost economic growth. Some experts see wiggle room for a larger budget shortfall so long as the economy continues to grow.
Producer prices in Canada rose by 0.2% in August from July on higher prices for pork products, as well as precious metals, Statistics Canada said.
Canada’s gross domestic product data for July is due on Tuesday.
The U.S. dollar .DXY climbed on Monday against a basket of major currencies, benefiting from seasonal demand and uncertainty arising from the U.S.-China trade war.
The price of oil, one of Canada's major exports, fell on fading concerns of supply shortfalls and conflicts in the Middle East after the Sept. 14 attack on Saudi Arabia. U.S. crude oil futures CLc1 settled 3.3% lower at $54.07 a barrel.
Canadian government bond prices edged lower across much of the yield curve, with the two-year CA2YT=RR down 1.5 Canadian cents to yield 1.583% and the 10-year CA10YT=RR falling 7 Canadian cents to yield 1.366%.
Reporting by Fergal Smith; Editing by Alistair Bell and Sandra Maler
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