The Canadian dollar appreciated to a two-week peak against its U.S. counterpart on Thursday as investors capitalized on market fluctuations following the release of U.S. employment data, leading to a sell-off of the greenback.
The loonie was trading 0.2% higher at 1.3560 per U.S. dollar, equivalent to 73.75 U.S. cents, after reaching its highest intraday level since June 17 at 1.3557.
Stronger-than-anticipated U.S. jobs data contributed to the U.S. dollar’s rise against a range of major currencies; however, the greenback could not maintain the gains it achieved against the Canadian dollar.
“The market continues to show a strong inclination to sell rallies in the greenback,” stated George Davis, chief technical strategist at RBC Capital Markets.
A Reuters poll of FX analysts predicts that the U.S. dollar will remain weak in the upcoming months, entangled in increasing U.S. debt concerns, unpredictable tariff policies, and rising expectations for interest rate cuts.
Canada’s trade deficit decreased to C$5.9 billion ($4.34 billion) in May after reaching a record high of C$7.6 billion in April. Exports rose by 1.1% on a monthly basis following an 11% decline in April, as increased shipments of gold to the United Kingdom compensated for reduced trade with the United States.
“The Canadian dollar is largely ignoring domestic fundamentals and is instead simply following most of its global counterparts upward against the greenback,” remarked Karl Schamotta, chief market strategist at Corpay.
The price of oil, a key export for Canada, declined by 0.7% to $66.95 a barrel, reversing some of the gains made the previous day.
Canadian government bond yields increased across the curve, mirroring movements in U.S. Treasuries. The 10-year yield rose by 2.8 basis points to 3.387%.