The Canadian dollar rose to a 10-day high against its US counterpart on Monday, as oil prices climbed and US President Donald Trump said he disagreed with the US Federal Reserve's decision to raise interest rates. The US dollar fell against a basket of major currencies as Trump showed his displeasure with Fed tightening.
"I think it is mostly a (US) dollar move today," said Erik Nelson, a currency strategist at Wells Fargo. "I suspect what is probably contributing to that is some of these comments from Trump around his lament for the higher interest rates from the Fed."
At 3:28 p.m. (1928 GMT), the Canadian dollar was trading 0.1 percent higher at C$1.3050 to the greenback, or 76.63 US cents. The currency touched its strongest level since August 10 at C$1.3046. It was boosted on Friday by data showing that Canada's annual inflation rate surged to 3.0 percent in July, its highest level in nearly seven years. The acceleration in inflation raised expectations that the Bank of Canada might raise interest rates again as soon as next month.
Canadian government bond prices were higher across a flatter yield curve in sympathy with US Treasuries. The two-year rose 1.5 Canadian cents to yield 2.103 percent and the 10-year climbed 12 Canadian cents to yield 2.254 percent. The gap between the two-year yield and its US equivalent narrowed by 2.1 basis points to a spread of 48.8 basis points in favor of the US bond, its narrowest since May 30.
The price of oil, one of Canada's major exports, rose as investors grew more concerned about an expected fall in supply from Iran because of US sanctions and worried less that a trade war between the United States and China would hurt economic growth.
Comments
Comments are closed.