1 week ago
Canadian dollar nears three-month high as oil prices climb
The Canadian dollar became stronger compared with the U.S. dollar.
It reached its best level in almost three months.
Higher oil prices helped because oil is one of Canada’s major exports.
The U.S. dollar was also weakened by concerns about rising U.S. government debt.
Canada and the United States were discussing a possible trade deal in Washington.
Such a deal could reduce tariffs between the two countries.
However, one analyst said traders were becoming tired of trade-related news.
Canadian government bond yields also increased as U.S. Treasury yields moved higher.
The Canadian dollar reached its strongest intraday level against the U.S. dollar since May 21.
Higher oil prices and broad-based U.S. dollar weakness supported the loonie, an analyst said.
U.S. crude futures rose 2% to $87.50 a barrel after Donald Trump warned of retaliation against countries supporting Iran.
Canadian and U.S. trade negotiators met in Washington for a second day to pursue a deal addressing tariffs and counter duties.
Canadian bond yields rose, with the 10-year yield reaching its highest level since May 2024 at 3.760%.
- Who
- The Canadian dollar, investors, Canadian and U.S. trade negotiators, and analyst Darren Richardson.
- What
- The Canadian dollar approached a three-month high while Canadian bond yields rose.
- Where
- The currency traded in Toronto, while trade negotiations took place in Washington.
- When
- Thursday, Aug. 20; negotiators were meeting for a second consecutive day.
- Why
- Higher oil prices, broad-based U.S. dollar weakness, and optimism about a possible Canada-U.S. trade deal supported the currency.
Trade optimism
Trade caution
Prospects for a trade deal
Trade optimism
The continued meeting of Canadian and U.S. negotiators created some optimism that a deal could be finalized and tariffs and counter duties reduced.
Trade caution
Darren Richardson said the market was somewhat exhausted by trade-related developments, limiting the impact of that optimism.
Key facts
- Canadian dollar
- Trading 0.1% higher at 1.3790 per U.S. dollar, or 72.52 U.S. cents.
- Intraday high
- 1.3757 per U.S. dollar, the strongest level since May 21.
- U.S. crude oil
- Futures rose 2% to $87.50 per barrel.
- U.S. government debt
- Total debt topped $40 trillion for the first time, according to the Treasury Department.
- Canadian 10-year yield
- Rose 5.8 basis points to 3.752%, after reaching 3.760%.
- Trade negotiations
- Canadian and U.S. negotiators met for a second day in Washington.
- Monthly bond move
- Canada’s 10-year yield rose about 19 basis points over roughly one month, the largest increase among G7 sovereign bonds.
Quotes
Darren Richardson
Chief operating officer at Vantry Capital Inc.
“There is some optimism there but I think the market is a bit exhausted when it comes to trade.”
livemint.com
Sources
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