Canadian dollar hits eight-week low as investors brace for domestic slowdown
FXC•Dollar strength, oil and bond yields move
- The US dollar
=USDrose to its highest level in nearly two months against a basket of major currencies as investors priced in a rate hike cycle from the Federal Reserve, while oil prices jumped as comments from Iran cast doubt on progress in peace talks. - US crude oil futures
CLc1were trading 2.2% higher at $92.49 a barrel. Oil is one of Canada's major exports. - Canadian bond yields moved higher across the curve, tracking moves in US Treasuries.
- The 10-year
CA10YT=RRwas up 11.2 basis points at 3.942%, moving back in reach of the nearly three-year high it touched last week at 3.987%. Still, it moved 1.7 basis points further below the US equivalent to a gap of about 115 basis points in favor of the US note, marking the largest gap since June 2025.
Canadian dollar weakens on tariff and slowdown worries
The Canadian dollar weakened to an eight-week low against its US counterpart on Wednesday as the greenback notched broad-based gains and investors bet that ongoing trade uncertainty would slow Canada's economy.
The loonie CAD= was trading 0.3% lower at 1.41 per US dollar, or 70.92 US cents, after touching its weakest intraday level since July 29 at 1.4106.
Markets expect softness as tariffs hit targeted sectors
- "Markets, we think, are bracing for some softness in the economy in the coming months as US tariffs hit targeted sectors, and consumers and firms rein in spending and investment," Karl Schamotta, chief market strategist at Corpay, said in a note.
