Treasury Yields Soar, Sinking Loonie as October Rate Hike Odds Rise

The Canadian dollar took a hit as US Treasury yields soared to 5.15% on strong US PMI data and hawkish Fed comments, making an October rate hike increasingly likely.

Oil prices consolidated recent losses in hopes of a truce between the US and Iran, but a warning from an IRGC adviser that another attack could widen the conflict into the Indian Ocean tempered optimism.

The US dollar continued to rally as markets assigned a 75% probability to an October Fed hike. Canadian retail sales are expected to have slipped 0.5% in July, but recent economic developments may overshadow this report.