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Canadian dollar falls as investors weigh hot U.S. inflation data -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – This illustration was taken in Toronto on January 23, 2015 and features a Canadian dollar coin commonly called the “Loonie”. REUTERS/Mark Blinch/File Photograph

TORONTO (Reuters), The Canadian dollar fell against the greenback Thursday, as U.S. data showed that inflation rose to a record 40 year high in January. This raised hopes for Fed-led interest rate increases.

U.S. bonds yields rose as the U.S. consumer prices index rose at 7.5% annually. The increase fuels speculation that the Fed will raise interest rates by 50 basis points in the next month.

After trading between 1.2666 and 1.2717, the Canadian dollar fell 0.3% to 1.2707, or 78.70 U.S.cents.

Protests against Canada’s Pandemic Measures led to the closure of the U.S.-Canada Trade Route. This caused the currency to plummet.

Canada’s main export was oil. The possibility of U.S. and Iranian nuclear talks leading to an increase global crude supply put pressure on the price. Prices fell 0.5%, to $89.26 per barrel.

The curve showed that Canadian government bonds yields were more than the U.S. Treasuries.

The 10-year rose 4.7 points to 1.894%. It is now closer towards the 1.905% peak reached in January. That was almost three years after it had been at its highest point in over three.

 

 

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