The Canadian dollar CADUSD edged lower against its U.S. counterpart on Thursday, as investor sentiment turned less bullish and ahead of a parliamentary appearance by Bank of Canada Governor Tiff Macklem that could offer clues on the interest rate outlook.
Wall Street gave back some of its recent gains, pressured by some disappointing earnings results and prospects of further U.S. interest rate hikes.
U.S. rate hike expectations also weighed on the price of oil, one of Canada’s major exports.
It fell 2.1 per cent to $77.49 a barrel, while the Canadian dollar was trading 0.1 per cent lower at 1.3480 to the greenback, or 74.18 U.S. cents, after touching its weakest since April 12 at 1.3489.
Macklem is due to appear before the Standing Senate Committee on Banking, Commerce and the Economy at 11:30 a.m. ET (1530 GMT).
On Tuesday, the BoC governor said in testimony in the House of Commons that inflation is coming down quickly but that continued strong demand and the tight labour market are putting upward pressure on many service prices, and those are expected to decline only gradually.
Money markets expect the BoC to leave its policy rate on hold at 4.50 per cent, a 15-year high, through the end of the year.
Higher borrowing costs have weighed on the Canadian housing market.
The Teranet-National Bank House Price Index declined at a record annual pace of 6.9 per cent in March. Still, prices before seasonal adjustments were up 0.5 per cent compared to the previous month, the first increase in ten months.
Canadian government bond yields were lower across the curve, tracking moves in U.S. Treasuries. The 10-year eased 5.1 basis points to 3.012 per cent, extending its pullback from a six-week high on Tuesday at 3.107 per cent.