Canadian dollar consolidates gains after ‘hawkish taper’

Canadian dollar consolidates gains after ‘hawkish taper’

TORONTO - The Canadian dollar was little changed against its U.S. counterpart on Thursday, holding on to its gains from the prior day as investors weighed the potential for the Bank of Canada to reduce stimulus further over coming months.The loonie was trading nearly unchanged at 1.2502 to the greenback, or 79.99 U.S. cents, having traded in a range of 1.2472 to 1.2518.On Wednesday, it touched its strongest intraday level in one month at 1.2455 after the Bank of Canada signaled that it could start hiking interest rates in late 2022. The central bank sharply boosted its outlook for the Canadian economy and cut the pace of bond purchases to C$3 billion per week from C$4 billion. "The Bank of Canada met almost all of our expectations for a hawkish taper," Derek Holt, vice president of capital markets economics at Scotiabank, said in a note. "I would advise penciling in a further taper (of bond buying) at the July MPR meeting."Also on Wednesday, the BoC said that it feared high housing prices could result in stretched borrowing and lending, leaving some households and financial institutions vulnerable to an economic downtown. Canadian new housing prices rose 1.1% in March from February, climbing 7.9%