Overview
- The loonie was on track for an eighth straight daily drop and touched 1.3767 per U.S. dollar, its weakest level since mid-April.
- The U.S. dollar strengthened after hotter inflation and growing bets on possible Federal Reserve rate hikes, pushing U.S. yields higher.
- Canada’s two-year bond yield sat about 105 basis points below the U.S. note, a gap that often pulls currency flows toward the greenback.
- Markets priced two Bank of Canada hikes by December as oil climbed near $105 a barrel, even though April minutes described a patient stance at a 2.25% policy rate.
- Recent data showed Canada lost 17,700 jobs in April and unemployment rose to 6.9%, signaling a softer economy that can weigh on the currency.