TORONTO, Sept 9 (Askume) – The Canadian dollar strengthened against the U.S. dollar on Monday as Wall Street rose but paced lower ahead of a speech by Bank of Canada Governor Tiff Macklem that could signal a rate cut.
The Canadian dollar rose 0.1% to 1.3553, or 73.78 U.S. cents, after hitting a two-week low of 1.3582 on Friday.
“The Canadian dollar’s recovery today is not really a good development coming from Canada,” said Mark Chandler, chief market strategist at Bannockburn Global Forex LLC.
“Today’s move is mainly due to the 1.36 level holding and US stocks gaining today. We have entered risk-on mode.”
Wall Street’s main indexes recovered from a week of sharp losses as focus turned to the size of the Federal Reserve’s 2024 rate cut and a key inflation report on Wednesday.
Canada is a major producer of commodities such as oil, so the currency is sensitive to changes in investor sentiment. US crude futures rose 1.5% to $68.67 a barrel.
McCallum will speak on global trade in London on Tuesday, having said last Wednesday that deeper cuts in interest rates may be needed if the economy is to be boosted.
Data on Friday showed the unemployment rate rose to 6.6%, the highest level in seven years (excluding the pandemic years of 2020 and 2021).
Canadian government bond yields were mixed as the curve approached inversion. The 2-year note rate fell 2 basis points to 3.030%, while the 10-year note rate rose 4.4 basis points to 3.010%.
Since July 2022, the 10-year note has been trading at a discount to the 2-year note.
