Loonie Soars on Rising Oil Prices and Weakening US Dollar
The Canadian dollar has reached its highest level in nearly three months against its US counterpart due to increased oil prices and a decrease in the value of the US dollar. The loonie touched its strongest intraday level since May 21 at 1.3757. According to Darren Richardson, chief operating officer at Vantry Capital Inc., higher oil prices and broad-based US dollar weakness linked to concern about rising US government debt are supporting the currency. Oil prices rose after US President Donald Trump warned of retaliation against nations supporting Iran.
US crude oil futures were trading 2% higher at $87.50 a barrel, while the Canadian dollar was trading 0.1% higher at 1.3790 per US dollar or 72.52 US cents. The price of oil is one of Canada's major exports, and its increase has had a positive impact on the loonie.
Canadian bond yields moved higher across the curve, tracking moves in US Treasuries. The 10-year yield was up 5.8 basis points at 3.752%, after earlier touching its highest level since May 2024 at 3.760%. Canadian retail sales data for June will be released on Friday and could offer additional clues on the state of the domestic economy.