Canadian Dollar Extends Weekly Losses Amid Interest Rate Worries

The Canadian dollar continued its downward trend against the US dollar on Friday, experiencing a weekly decline of 0.8%. This marks the fourth consecutive week of losses for the Canadian currency, as it fell to C$1.4257 per US dollar or 70.14 US cents.

The weak performance was largely attributed to lower oil prices and a widening interest rate differential between the United States and Canada.

According to Sarah Ying, head of foreign exchange market strategy at CIBC Capital Markets, 'Higher oil prices and concerns that inflation could remain elevated have increased pressure on global central banks to adopt a more hawkish stance.'

The US dollar has been gaining strength against major currencies, with the Canadian dollar facing pressure due to its relatively weaker position. The widening bond yield gap, where Canada's two-year bond yield fell by 4 basis points relative to its US counterpart, further contributed to the decline.