Investing.com — The Canadian dollar was under pressure early Thursday as a stronger U.S. dollar and widening yield differentials kept the loonie near its weakest levels in several weeks, while investors assessed fresh U.S. labour-market data and volatile oil prices.
At 8:37 a.m. ET, USD/CAD was trading around the C$1.424 area, putting the Canadian dollar at roughly 70.2 U.S. cents. The pair had opened near C$1.4236 and was trading close to the session’s upper end, according to intraday market data.
The move extends a recent weakening trend. USD/CAD rose to C$1.4236 on Wednesday, after starting the session at C$1.4191, and the pair has climbed sharply from around C$1.40 earlier in September.
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The main pressure on the loonie has come from the widening gap between U.S. and Canadian bond yields, which has increased the relative appeal of dollar-denominated assets. The Canadian dollar had already fallen to a 12-week low last week as Canadian yields declined relative to U.S. rates.
The U.S. dollar also remains broadly supported by elevated Treasury yields and expectations that higher energy prices could keep inflation pressures persistent. Reuters reported on Thursday that the dollar was holding near a two-month high against a basket of major currencies.
Oil is another factor for the commodity-linked Canadian currency. Crude prices remain volatile amid geopolitical tensions, while global bond yields have risen sharply. Reuters reported Thursday that the combination of a global bond selloff and oil-price volatility was weighing on Canadian market sentiment.
Canadian investors will also be watching the latest U.S. labour-market indicators, including weekly jobless claims and the Challenger job-cuts report, ahead of Friday’s U.S. employment report. Canada’s manufacturing PMI is also due during the session.
Original Article
Canadian dollar weakens as U.S. dollar strength, yield gap keeps pressure
Dollar holds as elevated U.S. yields overshadow cooling inflation data
Sterling today: Pound slips as global bond rout lifts dollar, gilt yields hit 6%
