Canadian Dollar in Narrowest Range in a Month on Growth Outlook
The Canadian dollar traded at the narrowest range with its U.S. counterpart in a month as traders speculated whether measures taken by central banks around the world will spur economic growth.
The currency was little changed versus the U.S. dollar after reports showed wholesale prices in the nation’s largest trading partner rose more than forecast last month and confidence among U.S. consumers unexpectedly rose in October. It has traded in the range of 0.003 cents per U.S. dollar, the tightest since Sept. 3.
“This is the very definition of a range trade for the Canadian dollar,” David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD securities unit in Toronto, said in a phone interview from Toronto.
Canada’s currency traded at 97.92 cents per U.S. dollar at 10:16 a.m. in Toronto, compared with 97.86 cents yesterday. The loonie, as the currency is often referred to because of the waterfowl on the C$1 coin, is little changed this week. One Canadian dollar buys $1.02124.
“We’ve had a strong bearish trend on dollar Canada since the early June high,” James Chen, chief technical strategist at FX Solutions LLC, said in a phone interview from London. “All the technical signs are pointing to the downside. The Canadian dollar-greenback cross is forming a bear flag, a pattern that slightly retraces a previous decline. The sell point is when price penetrates the lower trend line of the flag area.”
The Thomson Reuters/University of Michigan preliminary October consumer sentiment index increased to 83.1 from 78.3 the prior month. The gauge was projected to fall to 78, according to the median forecast of 71 economists surveyed by Bloomberg News.
The U.S. producer price index climbed 1.1 percent after a 1.7 percent gain in August, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of 76 economists called for a 0.8 percent increase. So-called core producer inflation, which excludes volatile food and energy prices, was unchanged, the first time it didn’t increase since October 2011.
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