The Canadian dollar weakens against the US dollar, while benchmark government bond yields rise.
- On Friday, the Canadian dollar weakened against the US dollar, while benchmark government bond yields climbed. The Canadian dollar fell 0.1% to 1.3821 against the US dollar, trading in a range of 1.3810 to 1.3844, equivalent to 72.35 US cents.
- The yield on Canada’s 10-year government bond rose 2 basis points to 3.472%, while the yield on the US 10-year benchmark Treasury note rose to 4.3071% over the same period. The US-Canada yield spread remained around 83.5 basis points.
- Market participants noted a certain divergence between the weaker Canadian dollar and oil price movements. US May crude oil futures rose 36 cents on Friday to $98.23 per barrel, yet as a commodity currency, the Canadian dollar did not fully benefit from the rise in oil prices.
- On the trading psychology front, the sensitivity of the Canadian dollar to interest rates and oil prices is currently being offset by multiple factors. US tariffs on key Canadian industries, uncertainties in global trade caused by Middle East tensions, and slack in Canada’s domestic labor market have all combined to suppress the Canadian dollar’s performance. Looking ahead, attention should be paid to the Bank of Canada’s interest rate decision later this month and whether oil prices can break further above $98 per barrel.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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