Canadian Dollar Weakens Under Pressure From Stronger US Dollar
The Canadian dollar has been under pressure due to a stronger US dollar and widening yield differentials. At 8:37 AM ET, the USD/CAD pair was trading around C$1.424, with the loonie at roughly 70.2 US cents. This marks a recent weakening trend, with the pair climbing sharply from around C$1.40 in September.
The main pressure on the Canadian dollar has come from the widening gap between US and Canadian bond yields, which has increased the relative appeal of dollar-denominated assets. The Canadian dollar had already fallen to a 12-week low last week due to declining Canadian yields relative to US rates.
Oil prices are also volatile amid geopolitical tensions, contributing to market sentiment in Canada. Investors will be watching the latest US labour-market indicators, including weekly jobless claims and the Challenger job-cuts report, ahead of Friday's US employment report.