Canadian dollar steadies after posting longest daily winning streak in four years
TLT•The Canadian dollar was nearly unchanged at 1.4010 per U.S. dollar after seven straight daily gains, its longest winning streak since March 2022. Investors saw about an 80% chance the Bank of Canada would raise its policy rate by a quarter point to 2.50% on Wednesday.
1. Dollar pauses after rally
The Canadian dollar steadied on Monday after seven straight days of gains, trading nearly unchanged at 1.4010 per U.S. dollar, or 71.38 U.S. cents. It had ranged from 1.3999 to 1.4055, after touching its strongest intraday level since September 16 on Friday at 1.3966 per U.S. dollar.
2. Rate decisions in focus
CIBC Capital Markets’ Sarah Ying said a shift in expectations for the Federal Reserve and Bank of Canada had driven the currency’s recent strength. Investors saw roughly an 80% chance the Bank of Canada would raise its benchmark rate by a quarter point to 2.50% on Wednesday; the Fed was expected to hold rates, though investors believed a pause in rate hikes would not last. Speculators’ net short positions in the Canadian dollar fell to 74,709 contracts as of October 20 from 94,765 a week earlier. Oil fell 0.9% to $102.30 a barrel, while Canada’s 10-year bond yield slipped 1.5 basis points to 3.832%.
