Canadian dollar gains as oil prices rally, investors weigh British PM Liz Truss’s resignation

The Canadian dollar CADUSD strengthened against its US counterpart on Thursday as commodity prices climbed and investors weighed the resignation of the British prime minister.

The price of oil, one of Canada’s major exports, rose in response to tighter supplies and on news that China is considering a cut in the duration of quarantine for inbound visitors.

US crude prices were up 2.3 per cent at $87.50 a barrel, while the safe-haven US dollar gave back some recent gains against a basket of major currencies, including sterling, as Liz Truss said she was resigning as British prime minister.

Truss was brought down by an economic program that sent shockwaves through financial markets last month.

The Canadian dollar was up 0.4 per cent at 1.3713 to the greenback, or 72.92 US cents, after trading in a range of 1.3698 to 1.3806.

The currency strengthened despite further evidence that the slowdown in Canada’s housing market is depressing prices.

Canadian home prices tumbled by 3.1 per cent in September from August, the largest monthly decline since the index was launched in 1999, while year-on –year price gains continued to slow, Teranet–National Bank National Composite House Price data showed.

Even as recession worries intensify in Canada, the central bank is likely to go ahead with another supersized interest rate hike next week after data showed underlying inflation was stubbornly persistent despite aggressive tightening, analysts said.

Canadian government bond yields were higher across the curve, tracking the move in US Treasuries. The 10-year touched its highest since June 16 at 3,584 per cent before dipping to 3,569 per cent, up 1.8 basis points on the day.


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