(Alastair Sharp – Reuters)
The Canadian dollar fell to a fresh two-month low against the greenback on Thursday as oil prices slumped to levels not seen since an OPEC-led pact to curb production, and the gap between U.S. and Canadian yields widened.
Oil, one of Canada’s major exports, extended its biggest price falls this year as record U.S. crude inventories kept sentiment weak, pointing to a global glut despite supply cuts.
Meanwhile, Canada’s 5-year yield fell 2.7 basis points further below its U.S. equivalent to a spread of -87.8 basis points, its widest gap since January 2016, while the 2-year spread was just shy of a similar record.
“With interest rate differentials where they are and oil prices falling back, I’m not too surprised at all to see the Canadian dollar under the cosh a little bit here,” said Shaun Osborne, chief currency strategist at Scotiabank. Click here to read more.