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Loonie Strengthens as Bank of Canada Rate Hike Chances Increase, Oil Rises

Posted June 16, 2017

Under Economic Issues, International Trade Issues

(Fergal Smith – Reuters)

The Canadian dollar strengthened on Friday against its U.S. counterpart as oil prices rose, while the gap between Canadian and U.S. bond yields narrowed further after the Bank of Canada signaled this week that higher interest rates lie ahead.

At 9:24 a.m. ET, the Canadian dollar was trading at 75.52 U.S. cents or $1.3242 to the greenback, up 0.2 per cent. The currency traded in a range of $1.3222 to $1.3272.

The 2-year spread narrowed 2.7 basis points to -41.6 basis points, its smallest gap since Feb. 24, as Canadian government bonds underperformed their U.S. counterparts in anticipation of a rate hike from Canada’s central bank this year. Click here to read more.