The Canadian dollar edged higher against its U.S. counterpart on Tuesday, recovering from a two-month low it touched earlier, as investors awaited domestic economic data expected this week.
Canadian inflation data for July is due on Wednesday and retail sales for June will come out on Friday. Reuters polls predicted a 1.7 per cent annual rate of inflation and a 0.1 per cent decrease for June retail sales.
“Key points will be tomorrow’s CPI and then retail sales on Friday ... so I think people are just more of a wait-and-see on the data,” said Don Mikolich, executive director of foreign exchange sales at CIBC Capital Markets.
The Canadian dollar was trading 0.1 per cent higher at 1.3311 to the greenback, or 75.13 U.S. cents, at 3:44 p.m. Earlier in the day, the currency touched it weakest intraday level since June at 1.3346.
The rise for the loonie came as the price of oil, one of Canada’s major exports, steadied on optimism that U.S.-China trade tensions will ease and hopes that major economies will take stimulus measures to ward off a possible economic slowdown. Oil prices had earlier fallen after the Organization of Petroleum Exporting Countries cut its forecast for global oil demand growth in 2020.
U.S. crude oil futures settled 0.2 per cent higher at $56.34 a barrel.
Canadian factory sales decreased by 1.2 per cent in June from May on lower petroleum and coal product sales, domestic data showed, although the decline was less than the 1.7 per cent forecast.
Canadian government bond prices were higher across the yield curve, with the two-year up 3 cents to yield 1.343 per cent and the 10-year rising 22 cents to yield 1.165 per cent.
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