Canadian dollar gives back weekly gain as bond yields rebound

The Canadian dollar CADUSD weakened against its US counterpart on Friday, with the currency giving back its gains from earlier in the week as global bond yields rebounded and investors eyed Black Friday sales for clues on the health of the US economy.

The loonie was trading 0.4 per cent lower at 1.3390 to the greenback, or 74.68 US cents, after moving in a range of 1.3318 to 1.3395. For the week, it was on track to be nearly unchanged.

Yields on US Treasuries and major European sovereign bonds rose after they were pressured this week by the Federal Reserve’s signal that it could slow the pace of interest rate hikes as soon as next month, while the US dollar clawed back some recent declines against a basket of best currencies.

Wall Street’s main indexes were set for a subdued open, with investors closely monitoring the major retailers as Black Friday sales began against the backdrop of stubbornly high inflation and worries about a potential recession next year.

Canada sends about 75 per cent of its exports to the United States, including oil.

Oil was up 1.2 per cent at $78.86 a barrel, closing a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil.

Canadian government bond yields were higher across the curve, tracking the move in other sovereign debt markets.

The 10-year rose 4.8 basis points to 2.983 per cent, after on Thursday touching its lowest intraday level in more than three months at 2.907 per cent.


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