TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Monday, with the loonie trading in a narrow range ahead of domestic data later in the week that could help guide expectations for the interest rate outlook.
At 9:21 a.m. ET (1421 GMT), the Canadian dollar CAD=D4 was nearly unchanged at C$1.2871 to the greenback, or 77.69 U.S. cents. The currency traded in a range of C$1.2843 to C$1.2881.
The loonie dipped 0.1 percent last week after being pressured on Friday by weaker-than-expected domestic manufacturing data.
The currency also fluctuated last week on remarks by Bank of Canada Governor Stephen Poloz.
Poloz worried about the potential to slip into a “deflationary scenario” if interest rates are raised too fast to deal with financial imbalances, in an interview with The Globe and Mail that was published on Saturday.
Still, the central bank is leaving the door open to further rate hikes in early 2018, making it clear that a number of uncertainties that could derail the economy, such as North America Free Trade Agreement (NAFTA) renegotiation, are a reason for caution but not inaction.
NAFTA negotiators made some progress on less controversial issues last week but left untouched the thorniest subjects of autos, dispute settlement and an expiry clause to be tackled at pivotal talks in January in Montreal.
Foreign investment in Canadian securities accelerated in October, driven by a record purchase of bonds, data from Statistics Canada showed.
Canada’s inflation report for November and October retail sales data are due on Thursday, while gross domestic product data for October is due on Friday.
The price of oil, one of Canada’s major exports, was supported by a North Sea pipeline outage and a Nigerian oil worker strike.
U.S. crude CLc1 prices were up 0.6 percent at $57.65 a barrel.
The U.S. dollar .DXY dipped against a basket of major currencies amid doubt whether a proposed U.S. tax overhaul program would have a major impact on economic growth, after the bill moved another step closer to ratification over the weekend.
Speculators have trimmed bullish bets on the Canadian dollar for eight of the last nine weeks, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday.
Canadian government bond prices were lower across the yield curve, with the two-year CA2YT=RR down 3.5 Canadian cents to yield 1.569 percent and the 10-year CA10YT=RR falling 12 Canadian cents to yield 1.85 percent.
Reporting by Fergal Smith; Editing by Jonathan Oatis