(Adds strategist quote and details throughout; updates prices)
* Loonie trades in a range of 1.2472 to 1.2534.
* Price of U.S. oil settles 0.1% higher
* Canadian 10-year yield was nearly unchanged at 1.522%
By Fergal Smith
TORONTO, April 22 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday as a decline in
risk appetite was offset by the Bank of Canada's more hawkish
stance, with the currency holding on to its gains from the prior
day.
The loonie was trading nearly unchanged at 1.2500 to
the greenback, or 80.00 U.S. cents, having traded in a range of
1.2472 to 1.2534.
It was one of only three G10 currencies to keep pace with
the U.S. dollar as U.S. stocks dived on reports that President
Joe Biden planned to propose nearly doubling the capital gains
tax.
The others were the Swiss franc and the Japanese yen
, which are both renowned safe-haven currencies.
"The BoC's relatively hawkish move yesterday may have moved
USD-CAD's trading band down a notch," said Ronald Simpson,
managing director, global currency analysis at Action Economics,
adding that the shift in yield spreads has supported the loonie.
The gap between Canada's 10-year yield and its U.S.
equivalent has declined to just 3 basis points in favor of the
U.S. bond from 19 basis points at the start of the month.
On Wednesday, the Canadian dollar touched its strongest
intraday level in one month at 1.2455 after the Bank of Canada
signaled 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 a
week from C$4 billion.
"I would advise penciling in a further taper (of bond
buying) at the July MPR meeting," Derek Holt, vice president of
capital markets economics at Scotiabank, said in a note,
referring to the bank's monetary policy report.
The price of oil , one of Canada's major exports,
settled 0.1% higher at $61.43 a barrel.
Canada's 10-year yield was little changed at 1.522%.
(Reporting by Fergal Smith; Editing by William Maclean and
Peter Cooney)
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