Canadian dollar extends weekly losing streak as interest rate spreads widen
TLT•The Canadian dollar fell 0.3% to 1.4257 per U.S. dollar and was down 0.8% for the week, on track for a fourth straight weekly decline. The gap between Canadian and U.S. two-year yields widened to about 157 basis points, its largest since February 2025.
1. Currency weakens
The Canadian dollar extended its weekly decline on Friday as oil prices fell and interest rate spreads between Canada and the United States widened. It traded at 1.4257 per U.S. dollar, or 70.14 U.S. cents, after ranging from 1.4202 to 1.42595. On Thursday, it touched an 18-month low of 1.4263 per U.S. dollar.
2. Yield gap widens
For the week, the loonie was down 0.8%, which would be its fourth consecutive weekly decline. The Canadian two-year yield fell 4 basis points further below the comparable U.S. rate, leaving a gap of about 157 basis points, the widest since February 2025. U.S. crude futures fell 1.6% to $91.40 a barrel after Group of Seven countries agreed to release 100 million barrels of diesel and crude from emergency reserves. The Canadian 10-year yield rose nearly 1 basis point to 3.940%, below Thursday's nearly three-year high of 4.042%.
