Canadian dollar weakens 0.1% against the greenback
Flash estimate shows factory sales falling in December
Price of U.S. oil settles 2 cents higher
Canadian bond yields ease across curve
(Adds strategist quote and details throughout; updates prices)
By Fergal Smith
TORONTO, Jan 25 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as the Bank of Canada raised interest rates as expected in a move that could mark the end of the central bank's aggressive tightening campaign.
The loonie was down 0.1% at 1.3385 to the greenback, or 74.71 U.S. cents, after trading in a range of 1.3341 to 1.3428.
"The Bank of Canada rate announcement has not injected any new momentum into the CAD’s near-term direction," Shaun Osborne, chief currency strategist at Scotiabank, said in a note.
"If the economy plays out as the Bank of Canada expects, the implication is clearly that this is the top of the rate cycle."
The BoC hiked its key interest rate by 25 basis points to 4.5%, the highest level in 15 years, and became the first major central bank fighting global inflation to say it would likely hold off on further increases for now.
The move matched expectations in a Reuters poll.
A preliminary domestic estimate showed factory sales falling 1.8% in December from November, largely driven by decreases in the petroleum and coal product, wood product and primary metal industries.
The price of oil, one of Canada's major exports, steadied after a smaller than expected build in U.S. crude inventories. U.S. crude oil futures settled 2 cents higher at $80.15 a barrel.
Canadian government bond yields fell across the curve.
The 2-year was down 7.8 basis points at 3.577%, while the gap compared to the equivalent U.S. rate narrowed by 5.8 basis points to about 56 basis points in favor of the U.S. bond. (Reporting by Fergal Smith; Editing by Chizu Nomiyama and Alistair Bell)