The Canadian dollar was little changed against its broadly weaker U.S. counterpart on Friday, with news that Prime Minister Justin Trudeau is planning to call a snap election for Sept. 20 having little impact on the currency.
The loonie was trading nearly unchanged at 1.2515 to the greenback, or 79.90 U.S. cents, after trading in a range of 1.2509 to 1.2533. For the week, the loonie was on track to advance 0.3 per cent.
“The CAD took the (election) news in its stride,” analysts at Scotiabank, including Shaun Osborne, said in a note. “PM Trudeau is hoping voters reward the government with a majority for its response to the COVID outbreak.”
With some 63 per cent of its population fully vaccinated against COVID-19, Canada tops a ranking of major countries fighting the pandemic.
Investors are looking for signs that Canada’s next government could dial back historic levels of fiscal spending to support the economy during the pandemic, with activity already on track to make a full recovery.
The U.S. dollar fell against a basket of major currencies as data showed a smaller than expected rise in U.S. import prices in July. Investors are sensitive to inflation data since it could help determine when the Federal Reserve tapers asset purchases.
In domestic data, a preliminary estimate showed that Canadian producer prices rose by 0.1 per cent in July from June, led mainly by higher prices for energy and petroleum products, and chemicals and chemical products.
Oil is one of Canada’s major exports. It rose 0.1 per cent to$69.17 a barrel, with gains capped by a warning from the International Energy Agency that the spread of coronavirus variants is slowing demand growth.
Canadian government bond yields were lower across the curve, with the 10-year down nearly 1 basis point at 1.247 per cent. On Wednesday, it touched a four-week high at 1.295 per cent.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.