TORONTO: The Canadian dollar added to its weekly decline against its US counterpart on Friday as recent widening of the gap between US and Canadian bond yields weighed on the loonie.
The loonie was trading 0.1 percent lower at 1.4010 per UUS dollar, or 71.38 US cents, after touching its weakest intraday level since August 7 at 1.40144.
It left the currency on course for its eighth straight daily decline, which would be the longest such streak since May.
For the week, the currency was down 1 percent, as the Federal Reserve hiked interest rates and flagged further increases in borrowing costs in coming months.
“Wider front-end US-Canada yield spreads account for much of the CAD’s slippage over the past few days, according to our correlation matrix,”
Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note.
The Canadian 2-year yield was trading about 142 basis points below the US equivalent, marking the widest gap since July 28.
The US dollar rose on Friday against a basket of major currencies, including the yen, after two policy makers at the Bank of Japan dissented from a widely expected decision to raise interest rates.
US crude oil futures were trading 0.5 percent higher at USD102.43 a barrel as markets assessed Saudi supply alongside concerns about a widening Middle East conflict. Oil is one of Canada’s major exports.
Bank of Canada Governor Tiff Macklem is due to speak on Monday on economic developments.
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