Business · Markets · 3 hrs ago
Bond yields, not oil prices, are more closely linked to the Canadian dollar
The Canadian dollar has not climbed with oil prices in recent months.
The explanation is that currency markets have tracked the gap between Canadian and U.S. bond yields more closely than crude prices.
When Canadian yields are higher than U.S. yields, foreign investors may buy Canadian bonds, creating demand for the Canadian dollar.
The comparison found a 0.89 correlation with the two-year bond-yield gap, versus 0.50 with Western Canada Select crude prices.
This does not prove that yields cause currency movements, but it suggests oil prices have had a weaker connection to the loonie recently.
The relationship could change without warning, and no specific next step is given.
The Canadian dollar is more closely associated with bond yields than with oil prices, according to a Globe and Mail analysis.
The article says the correlation between the loonie and the Canada-U.S. two-year bond-yield spread is 0.89.
The correlation between the Canadian dollar and Western Canada Select crude prices is lower, at 0.50.
The analysis says higher Canadian yields can attract foreign investors who exchange currency for loonies to buy Canadian bonds.
It says this bond-yield relationship helps explain why sharply higher oil prices have not lifted the loonie in recent months.
- Who
- The Canadian dollar, also known as the loonie, and investors in Canadian bonds.
- What
- The loonie is more closely associated with bond yields than with oil prices.
- When
- In recent months; the article was published on October 15, 2026.
- Where
- Canada and the United States, in comparisons of Canadian and U.S. bond yields and Canadian crude prices.
- Why
- Higher Canadian bond yields can attract foreign investment, increasing demand for the loonie.
This story does not have two clearly opposing sides.
The loonie’s value was more closely associated with bond yields than with oil prices, according to the article.
The Globe and Mail published its analysis of the loonie’s relationship with yields and oil prices.
- Bond-yield correlation
- 0.89 for the Canadian dollar and the Canada-U.S. two-year bond-yield spread
- Oil-price correlation
- 0.50 for the Canadian dollar and Western Canada Select crude
- Bond-yield spread
- Difference between the Canadian and U.S. two-year government bond yields
- Publication date
- October 15, 2026