Business C$ steadies near a two-week high ahead of BoC business survey

Business C$ steadies near a two-week high ahead of BoC business survey

Business

TORONTO (Reuters) – The Canadian dollar was little changed against its U.S. counterpart on Monday, holding near an earlier 13-day high as stocks rallied globally and ahead of the release of a Bank of Canada business survey.

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FILE PHOTO: A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto, January 23, 2015. REUTERS/Mark Blinch /File Photo

The loonie CAD= was trading nearly unchanged at 1.3546 to the greenback, or 73.82 U.S. cents. The currency touched its strongest intraday level since June 23 at 1.3520.

Global stock markets .WORLD rallied to four-week highs as investors counted on a revival in China to boost global growth, even as surging coronavirus cases delayed business reopenings across the United States.

Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.

U.S. crude CLc1 prices were down 0.1% at $40.6 a barrel on concern that a spike in coronavirus cases could curb U.S. fuel demand.

The Bank of Canada releases its quarterly business outlook survey at 10: 30 a.m. (1430 GMT), which could help guide expectations for additional easing measures from the central bank to help the economy.

Since March, the BoC has slashed interest rates to a record low of 0.25% and begun quantitative easing, while Ottawa is rolling out more than C$170 billion in direct aid. Finance Minister Bill Morneau is due to present an economic and fiscal snapshot on Wednesday.

Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian government bond yields were higher across much of a steeper curve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR was up 1.1 basis points at 0.568%.

Canada’s employment report for June is due on Friday.

Reporting by Fergal Smith; Editing by Nick Zieminski

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