The Canadian dollar CADUSD was little changed against its U.S. counterpart on Monday, with the currency steadying near its weakest level in two and a half months as higher bond yields helped underpin the greenback against its major peers.
The loonie was trading nearly unchanged at 1.3550 to the greenback, or 73.80 U.S. cents, after trading in a range of 1.3497 to 1.3572. On Friday, the currency touched its weakest intraday level since June 1 at 1.3574.
“It’s just getting bullied by the broader U.S. dollar moves,” said Amo Sahota, director at Klarity FX in San Francisco. “The U.S. dollar is looking super-attractive as U.S. yields go higher again.”
The yield on benchmark 10-year Treasury notes hit 15-year highs as concerns fester that the Federal Reserve will keep interest rates higher for longer at a time deficit spending by the U.S. government gains increased attention.
An uncertain outlook for China’s economy has added to recent pressure on Canada’s commodity-linked currency, Sahota said.
The price of oil, one of Canada’s major exports, was down 0.6 per cent at $80.79 a barrel.
Canadian retail sales data for June, due on Wednesday, could offer clues on the strength of the domestic economy after it was buffeted by labour strikes and wildfires in recent months. Analysts expect the level of sales to be unchanged compared to May.
Wildfires ravaging Canada’s British Columbia province are showing some signs of easing and the weather conditions should improve through Monday into Tuesday, although crews are still battling “epic” blazes, emergency officials said.
Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries. The 10-year rose 5.8 basis points to 3.773 per cent.