CANADA FX DEBT-Canadian dollar holds near 3-year high ahead of 'event risk'
TORONTO, March 16 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday, but stuck to a narrow range as oil prices fell and investors hunkered down ahead of the outcome of the Federal Reserve's two-day monetary policy meeting.
The loonie CAD= was trading 0.1% higher at 1.2460 to the greenback, or 80.26 U.S. cents, having traded in a range of 1.2454 to 1.2500. On Monday, it touched a three-year high at 1.2439.
"There is a big event risk on the horizon and it doesn't look like markets are really happy to price in some big positions prior to it," said Simon Harvey, senior FX market analyst for Monex Europe and Monex Canada.
Fed policymakers are expected on Wednesday to forecast that the U.S. economy will grow in 2021 at the fastest rate in decades as the COVID-19 vaccination campaign gathers pace and a $1.9 trillion relief package washes through to households. nL1N2L82OT
Canada sends about 75% of its exports to the United States, including oil. U.S. crude oil futures CLc1 fell 1.7% to $64.29 a barrel as a recovery in demand was threatened by rising U.S. inventories and moves by some European states to suspend the use of a major vaccine. nL1N2LE08Y
Foreign investors bought a net C$1.3 billion in Canadian securities in January, led by provincial government bonds, Statistics Canada said. nT5N2JF01V
Canada's inflation report for February is due on Wednesday which could help guide expectations for the Bank of Canada policy outlook.
The central bank is likely to reduce its bond purchases as soon as next month, strategists say, which would provide the clearest signal yet that Canada's economy requires less help to emerge from the coronavirus crisis. nL1N2LA30S
Canada's 10-year CA10YT=RR was up less than half a basis point at 1.546%, having pulled back from a 14-month high intraday on Monday at 1.602%.
(Reporting by Fergal Smith
Editing by Marguerita Choy)
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