The Canadian dollar was little changed early Friday but remained under pressure near a multi-week low, as a broad U.S. dollar rally and elevated U.S. Treasury yields continued to weigh on the loonie.
At around 8:54 a.m. ET, USD/CAD was trading near C$1.4149, up about 0.08% on the day. The pair opened around C$1.4147 and had traded between roughly C$1.4140 and C$1.4150.
The move extends a recent weakening trend for the Canadian currency. The loonie came under pressure throughout the week after it had touched a two-month low as broad U.S. dollar strength and weak Canadian retail sales weighed on sentiment.
The latest pressure is largely coming from the U.S. rate market. The dollar was on track for a second straight weekly gain as surging Treasury yields and expectations of further Federal Reserve rate increases boosted demand for the greenback.
Fresh market commentary this morning is focusing on the continued strength of the U.S. dollar and expectations for a relatively tighter Federal Reserve policy path. That has kept the U.S. yield advantage over Canada at the centre of the currency trade.
The Canadian dollar has also struggled despite elevated oil prices, suggesting that the currency’s usual support from Canada’s energy exports is being outweighed by interest-rate and U.S. dollar dynamics.
Related articles
Canadian dollar holds near recent lows as U.S. dollar rally keeps pressure
Bond rout in shorter-term maturities eases up, but U.S. yields end week with gains
Yen jumps as Trump shows concern over its weakness, dollar halts daily win streak
