Canadian Dollar Poised for Monthly Gain as Oil Prices Soar
The Canadian dollar remained steady on Friday despite edging lower against its US counterpart. The loonie is still poised for a monthly gain of 1.2% as oil prices surged. Canada's GDP growth surpassed expectations, rising by 0.3% in May and pointing to an annualized second-quarter growth rate of 3.4%, its best quarterly performance in over three years.
According to Douglas Porter, chief economist at BMO Capital Markets, this data will provide the Bank of Canada with more evidence that the economy is adapting to trade uncertainty. However, he notes that it won't change the bigger picture concerns about fresh tariff threats and high energy prices.
The Bank of Canada is expected to keep its benchmark interest rate on hold in the coming months, with a 68% chance of a hike by year-end, up from 60%. The US dollar rose against a basket of major currencies after Japanese authorities intervened to prop up their currency. Canadian bond yields also increased, with the 10-year yield rising six basis points to 3.650%, near its top range since May.