Canadian Dollar Plunges as US Treasury Yields Soar
The Canadian dollar plunged yesterday and extended its losses overnight due to soaring US Treasury yields. The 10-year yield jumped to 5.36% from 5.202%, reaching its highest level in 24 years, while the CAD/US 10-year yield differential widened to -134.9 from -128.7.
Fed officials added fuel to the move, with Governor Lisa Cook stating that inflation has remained too high for too long and Minneapolis Fed President Neel Kashkari estimating inflation at roughly 3% and projecting one more rate increase this year followed by another next year.
The US dollar opened higher across the board, with the DXY reaching 101.86. Asian equity markets were mixed, but oil prices provided little support for the Canadian dollar despite WTI jumping from $88.81 to $92.26 on news that Houthi forces attacked Saudi Arabia's Abqaiq oil facility and US-Iran negotiations stalled.