Canadian Dollar in Narrowest Range in 6 Months on U.S. Shutdown
Canada’s dollar traded in the narrowest range since April as the U.S. government shutdown reached a third day, raising concern the political gridlock will slow growth in the nation’s largest trading partner.
The currency touched almost a two-week low against its U.S. counterpart amid speculation the standoff would merge with the fight about raising the U.S. debt ceiling later this month. It fell versus a majority of its most-traded peers, along with the U.S. dollar.
“The market is looking for inspiration here, it’s in a wait-and-see mode,” said John Curran, a senior vice president at CanadianForex Ltd., an online foreign exchange dealer, said by phone from Toronto. “It’s a lose-lose situation. If they resolve this, people would start buying the U.S. dollar. If this drags on, the Canadian will weaken too.”
The loonie, as the currency is nicknamed for the image of the aquatic bird on the C$1 coin, was little changed at C$1.0333 per U.S. dollar at 5 p.m. in Toronto. It depreciated earlier to C$1.0340 after touching C$1.0356 yesterday, the weakest level since Sept. 16. One Canadian dollar buys 96.78 U.S. cents. The loonie traded in a range of 0.27 cent, the least since April 1.
Canada’s benchmark 10-year government bond was little changed to yield 2.54 percent. The price of the 1.5 percent security due in June 2023 gained four cents to C$91.14.
The Canadian dollar lost 1.3 percent in the past month against nine developed-market peers tracked by the Bloomberg Correlation-Weighted Index. The U.S. dollar dropped 3 percent, while the Australian currency gained fell 0.3 percent.
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