The Canadian dollar was little changed against the greenback on Tuesday, consolidating from the previous day's drop, while soft oil prices added some pressure on the loonie.
Trading during the session was expected to be muted with the Canadian bond market closed for Remembrance Day. The Canadian dollar hit a more than five-year low last week but has managed to recoup some losses since. The currency is down about 1 percent since the start of November as it has been weighed by a drop in oil prices. Brent crude fell again on Tuesday and was most recently trading down 14 cents at $82.20 a barrel after earlier hitting its lowest level since October 2010. "Beyond today, the next week or two we may see a bit of a drift lower or at least a sideways move" in the U.S. dollar-Canadian dollar pairing, said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "The price action we saw late last week does suggest that we've probably run a little bit high on the topside now, we're probably due for a small correction, at least." The Canadian dollar was at C$1.1378 to the greenback, or 87.89 U.S. cents, slightly weaker than Monday's close of C$1.1374, or 87.92 U.S. cents. Osborne expects the underlying trend for the U.S. dollar-Canadian dollar remains higher, which will mean more weakness for the loonie, with the currency pairing likely to trade well in the teens over the first half of next year. "I don't think we go much below C$1.12 right now," he said. "If we get anywhere close to C$1.12, I think that's probably going to attract the buyers again."