Fergal Smith

TORONTO, (Reuters) – The Canadian dollar was unchanged against its U.S. safe-haven counterpart on Thursday despite Wall Street’s woes over geopolitical concerns. Investors remained steadfast in their belief that the Bank of Canada will raise interest rates several times by 2022.

It was close to unchanged at 1.2686, which is 78.83 U.S. Cents., following trading that ranged from 1.2676 up to 1.2734.

Mazen Issa (senior FX strategist, TD Securities) stated that the relationship between FX Vol (volatility), equity and bond markets vol is not as it was in the past.

What’s going on in Ukraine has caused the markets to take control of central bank pricing. “Not really.”

Markets expect that the BoC will hike March 2nd for the first time since Oct 2018, as well as six other times total, this year.

U.S. stock prices fell as investors sought out defensive investments and safer havens like bonds and gold, as the geopolitical tensions between Washington and Russia over Ukraine increased.

Oil, Canada’s main export, fell 2% to $91.76 per barrel, as negotiations for a new nuclear agreement with Iran reached their last stages. This could allow more oil supplies.

According to domestic data, foreign investors purchased a net C$37.56 trillion in Canadian securities during December. This was mainly due to new shares that resulted from cross-border acquisitions and mergers.

Canadian government bonds yields were less across a flatter curve than the U.S. Treasuries movement.

After reaching its highest intraday level of 1.995% on Wednesday, the 10-year yield eased by 4.5 basis point to 1.914%.