Investing.com – The Canadian dollar was steady near two-month lows against its U.S. counterpart on Tuesday as investors awaited the Bank of Canada’s latest monetary policy decision on Wednesday.
USD/CAD was trading at 1.2650 by 09:30 AM ET (01:30 PM GMT), almost unchanged for the day having touched an intra-day high of 1.2669, the most since August 31.
The loonie, as the Canadian dollar is also known, has weakened since Friday when data showing a drop in domestic retail sales underlined expectations that the BoC would keep interest rates unchanged this month after hiking in July and September.
Canada’s central bank is expected to hike rates once more this year, but most market watchers expect policymakers to hold off until December.
Meanwhile, demand for the greenback continued to be underpinned as investors remained focused on who will be the next chairman of the Federal Reserve.
President Donald Trump told reporters on Monday he is “very, very close” to deciding who should lead the Fed after interviewing five candidates for the position.
They include current Fed Chair Janet Yellen, whose term expires in February, as well as Fed Governor Jerome Powell, Stanford University economist John Taylor, Trump’s chief economic advisor Gary Cohn, and former Fed Governor Kevin Warsh.
The greenback was also boosted by expectations for U.S tax reforms after President Trump said Sunday that he was optimistic Congress would pass a tax plan he could sign by year’s end.