The Canadian dollar is taking a breather on the eve of what’s expected to be the Bank of Canada’s first rate increase since September 2010. The loonie has closed down in three of the last four trading sessions, and it’s drifting lower again in early trading today.

The cooling-down period comes after a remarkable run higher. Canada’s currency went on a tear after Bank of Canada Senior Deputy Governor Carolyn Wilkins got everyone’s attention with her hawkish tone a month ago. But for now, at least, traders are in wait-and-see mode ahead of tomorrow’s decision. Worth pointing out Gluskin Sheff’s David Rosenberg warned clients yesterday there “could be a risk of a classic ‘but the rumour, sell the fact’ post-BoC-meeting selloff.”  

We’re also hearing anecdotally that Canadian banks are “ridiculously busy” dealing with a surge of queries from customers looking to lock in their mortgage rates ahead of tomorrow’s decision. Check out BNN.ca for a roundup of analysis from some of Canada’s top housing experts, including this warning from Rob McLister: “Unfortunately, many don’t realize that the bond market front-runs BoC policy actions, so they end up locking in too late.”  

MANULIFE REACHES PRELIMINARY OSC SETTLEMENT

The Ontario Securities Commission announced a no-contest preliminary settlement with Manulife Securities today after the company self-reported internal control “inadequacies” that led to some clients paying excess fees. The OSC says Manulife has taken corrective action and the regulator isn’t alleging any dishonest conduct by the dealers involved. A hearing is scheduled for July 13 to confirm the settlement. 

B.C. WILDFIRES

More than 200 fires are still believed to be burning in British Columbia, with approximately 14,000 residents having been forced from their homes. Of course, this story is primarily about people. But we can’t ignore the fact that businesses are also being affected. The latest: West Fraser Timber announced late yesterday it’s suspending operations in three locations.

COUCHE-TARD TAKEOVER

Less than two weeks ago, Alimentation Couche-Tard was celebrating the close on its takeover of CST Brands. Even as it prepares to integrate 1,300 stores in that deal, the convenience store operator has moved on to its next target. This time, it’s privately-owned Holiday Stationstores. Terms of the purchase aren’t being disclosed. This acquisition delivers Couche-Tard another 522 stores across ten states – six of which are previously untapped by Couche-Tard. Where does the dealmaking end? We’ll chase answers to that today.

NAFTA EXPECTATIONS

We’re expecting to speak later this morning with former U.S. Ambassador to Mexico Carlos Pascual. Should be invaluable insight ahead of NAFTA negotiations and next week’s release of America’s objectives for those talks. Pascual recently wrote in a Wall Street Journal op-ed that he thinks “Canada has everything to gain” from NAFTA 2.0. Pascual is set to join us at 10:10 a.m. ET.

OTHER NOTABLE STORIES:

- Sotheby’s International Realty reckons “it’s too early to discern whether [Ontario’s Fair Housing Plan] will have a long-term impact” on the luxury housing market. The short term impact is unmistakable. Sales of homes priced at $1 million or more tumbled 31% across the Greater Toronto Area last month. Watch for our interview with Brad Henderson from Sotheby’s at 10:20 a.m. ET.

- The International Energy Agency says global energy investment fell 12% last year to US$1.7 trillion. Notably, clean energy accounted for a record 43 per cent of the total spend. Nonetheless, IEA Executive Director Fatih Birol says “current investment activity in oil and gas will have to rise from its current slump.”

- Four Seasons has disclosed that some of its guests’ credit card information was compromised after a third party reservation provider was hacked.

- Some more energy sector M&A this morning. Pengrowth Energy announced it's selling assets in the Olds/Garrinton area of Central Alberta for $300 million. The buyer is only being indentified as a "private company owned by a large Canadian life insurance company."

NOTABLE RELEASES/EVENTS

- Notable earnings: Jean Coutu, PepsiCo, Yum! Brands

- Notable data: Canadian housing starts (8:15 a.m. ET)

- Toronto Mayor John Tory and representatives from startup community unveil plan for new innovation festival (10:15 a.m. ET)

- Atlantic premiers make announcement alongside federal ministers in Steady Brook, Nfld. (10:30 a.m.)

- Fed Governor Lael Brainard delivers keynote at conference on normalizing central banks' balance sheets (12 p.m. ET)

- Open Text holds investor day meeting in Toronto. (12 p.m. ET)

- Alberta Premier Rachel Notley delivers remarks at Stampede Investment Forum (2:35 p.m. ET)

- Allen & Co. hosts annual Sun Valley conference