The Canadian dollar CADUSD edged lower against its U.S. counterpart on Wednesday, pulling back from an earlier six-day high, as oil prices fell and investors awaited a parliamentary appearance by Bank of Canada Governor Tiff Macklem.
Macklem and Senior Deputy Governor Carolyn Rogers are due to appear before the Senate banking committee at 3 p.m. ET (2000 GMT).
Last Wednesday, the central bank left its benchmark interest rate on hold at a record low of 0.25 per cent but signaled that hikes are coming. Money markets expect the first hike in March and at least five in total this year.
The price of oil, one of Canada’s major exports, seesawed near a seven-year high, as OPEC+ decided to stick to its planned output increase despite pressure from top consumers to raise production more quickly.
U.S. crude prices were down 0.2 per cent at $88.03 a barrel, while the U.S. dollar fell against a basket of major currencies as bets that the European Central Bank could raise interest rates sooner than expected bolstered the euro .
Both the ECB and the Bank of England are due to make interest rate decisions on Thursday. Investors are betting that the BoE will hike for the second time in less than two months.
The Canadian dollar weakened 0.1 per cent to 1.27 per greenback, or 78.74 U.S. cents, after touching its strongest intraday level since last Thursday at 1.2651.
The value of Canadian building permits fell by 1.9 per cent in December from November, Statistics Canada said.
Canada’s jobs report for January, due on Friday, could provide further clues on the strength of the domestic economy.
Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries. The 10-year eased 3.2 basis points to 1.760 per cent.
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