Canadian dollar steadies near eight-week high as oil jumps
FXC•Oil prices and bond yields move higher
- The price of oil, one of Canada's major exports, settled 5.05% higher at $82.13 a barrel on Monday after Iran and the U.S. traded demands for compensation, dimming prospects for a deal to reopen the Strait of Hormuz.
- Investors globally have worried that higher energy prices could worsen the inflation outlook, leading to tighter monetary policy from central banks, including the Bank of Canada.
- Canadian bond yields moved higher across the curve. The 10-year
CA10YT=RRwas up 7.4 basis points at 3.717%, its highest level since May 19.
Canadian dollar holds near eight-week high
The Canadian dollar steadied near an eight-week high against its U.S. counterpart on Monday as oil prices climbed and after recent employment data gave the currency a lift.
The loonie CAD= was trading nearly unchanged at 1.3940 per U.S. dollar, or 71.74 U.S. cents, after moving in a range of 1.3927 to 1.3964.
Jobs data and positioning support the loonie
- On Friday, the currency touched its strongest intraday level since June 10 at 1.3923 after data showed Canada's economy adding many more jobs than expected in July.
- "The Canadian jobs report helped the loonie make the step that it hadn't made earlier," said Amo Sahota, director at Klarity FX in San Francisco, adding that recent weakness in the U.S. dollar
.DXYhadn't benefited the loonie as much as some other currencies. - "The market is really short Canadian dollars. ... It was due a little bit of a squeeze," Sahota said.
