Canadian Dollar Declines for Eighth Straight Day Amid Widening Yield Spreads

The Canadian dollar declined for its eighth straight day on Friday, reaching its weakest level since August 7. It traded at 1.4010 per U.S. dollar or 71.38 U.S. cents, down 0.1 percent from the previous day.

This decline comes as the gap between U.S. and Canadian bond yields widens, with the Canadian 2-year yield being about 142 basis points below its U.S. equivalent, the widest since July 28. This has contributed to much of the CAD's slippage over the past few days, according to Scotiabank strategists.

The Federal Reserve's recent interest rate hike and flagging further increases in borrowing costs have also weighed on the Canadian dollar. The U.S. dollar rose against a basket of major currencies after two Bank of Japan policy makers dissented from a widely expected decision to raise interest rates.