Canadian Dollar Hits Seven-Week Low Amid Widening Bond Yield Gap

The Canadian dollar fell to a nearly seven-week low against its US counterpart on Tuesday as the bond yield gap between the two countries continued to widen.

Despite Bank of Canada Governor Tiff Macklem's recent shift toward a more hawkish tone, the widening interest rate differentials and rising trade uncertainty pushed the USD/CAD exchange rate higher. The Canadian dollar weakened 0.3% to C$1.4075 per US dollar, or 71.05 US cents.

Kevin Ford, foreign exchange and macro strategist at Convera, said that 'the combination of widening interest rate differentials, rising trade uncertainty, and bullish technical momentum is pushing USD/CAD toward fresh highs.'