Canadian Dollar Heads for Third Straight Weekly Decline Amid Rising US Yields

The Canadian dollar was on track for its third consecutive weekly decline against the US dollar, with its value dropping to its weakest level since July. According to Amo Sahota, director at Klarity FX in San Francisco, 'the move is exclusively USD driven,' citing rising US yields and a 150 basis point yield spread between the US and Canada.

The Canadian dollar's decline was partly due to falling bond yields, which made it less attractive compared to the US. Canada's 2-year yield fell 6.2 basis points below the equivalent US rate, widening the gap to around 153 basis points, its widest since February 2025.

Oil prices also had an impact on the Canadian dollar's value, as markets weighed the possibility of a truce between the US and Iran. US crude oil futures fell by 2.6% to $92.17 a barrel.