Canadian dollar tries to bounce as yield spreads compress
TLT•The Canadian dollar rose 0.1% to 1.4245 per U.S. dollar as the gap between U.S. and Canadian two-year yields narrowed to 152 basis points from 158 basis points on Monday. Investors awaited Canada's September employment report, due Friday.
1. Dollar edges higher
The Canadian dollar edged higher Thursday after touching an 18-month low of 1.4293 per U.S. dollar on Monday. It traded at 1.4245 per U.S. dollar, or 70.20 U.S. cents. Erik Bregar said the currency was trying to bounce and cited compression in the two-year yield spread.
2. Oil and jobs in focus
U.S. crude futures rose 3.1% to $91.02 a barrel amid persistent supply concerns linked to increased attacks on shipping in the Gulf and the Strait of Hormuz. Canada's September employment report is due Friday; economists expect 9,200 jobs to be added and the unemployment rate to rise to 6.5% from 6.4% in August.
3. Bond yields mixed
Canadian government bond yields were mixed across a flatter curve. The 10-year yield fell 1.2 basis points to 3.936%, below the 3-year high of 4.042% reached last week.
