CANADA FX DEBT-C$ steadies as investors stick to rate hike bets despite GDP dip - REUTERS
* Loonie trades in range of 1.2879 to 1.2933
* Canadian GDP likely declines 0.2% in May
* Price of U.S. oil falls 1.3%
* Canadian bond yields ease across curve
TORONTO, June 30 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday but was on
track for a steep quarterly decline, as equity markets globally
fell and preliminary domestic data showed the economy
contracting in May.
Stocks sank and the safe-haven U.S. dollar rose against a
basket of major currencies, as investors worried that the latest
show of central bank determination to tame inflation will cause
economies to slow rapidly.
Canada's economy likely declined 0.2% in May, following a
gain of 0.3% in April which matched estimates.
Money markets expect the Bank of Canada to hike interest
rates by three-quarters of a percentage point at its next policy
decision on July 13, which would be its biggest hike in 24
The central bank is due to release on Monday quarterly
surveys of businesses and households, which include measures of
their inflation outlooks. The risk of inflation becoming
entrenched in Canada's economy is growing, analysts say.
The Canadian dollar was nearly unchanged at 1.2890 to
the greenback, or 77.58 U.S. cents, after trading in a range of
1.2879 to 1.2933.
For the month of June, the loonie was on track to fall 1.9%.
It has dropped 3% since the start of the second quarter, which
would be its biggest quarterly decline since the start of the
coronavirus pandemic in 2020.
The price of oil , one of Canada's major exports, fell
1.3% to $108.39 a barrel as investors weighed a build in U.S.
fuel product inventories.
Canadian bond yields were lower across the curve, tracking
the move in U.S. Treasuries. The 10-year was down
4.6 basis points at 3.267%, after touching earlier this month a
12-year high of 3.664%.
The last bond auction of the current quarter, an offering of
2-year bonds, is due, with the bidding deadline at 12 p.m. EDT
(Reporting by Fergal Smith
Editing by Paul Simao)