Canadian Dollar Surges to 11-Day High Amid Investor Optimism
Canadian Dollar Gains 0.4% Against Greenback, Touches 11-Day High
The Canadian dollar (CAD) rose 0.4% against the U.S. dollar (USD) on Friday, touching its strongest level since February 16 at 1.3626. The loonie was trading at 1.3630 per USD, or 73.37 U.S. cents.
Economic Data
Canada's gross domestic product (GDP) decreased by 0.6% on an annualized basis in the fourth quarter, marking the slowest year of growth since 2020. Economists and the Bank of Canada had expected a flat reading. Manufacturers dipped heavily into inventories to meet demand, contributing to the decline.
Financial Markets
The 10-year Canadian government bond yield approached a three-month low, easing by 3.6 basis points to 3.139%. This marks its lowest level since November 28. The U.S. dollar edged lower against a basket of major currencies, while the price of oil rose by 2.7% to $66.99 per barrel.
Trade Agreement
Canadian Prime Minister Mark Carney will meet business leaders in Mumbai to discuss a comprehensive trade agreement, which is expected to be completed by November. This agreement is seen as a positive development for the Canadian economy.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Investor Takeaway
Investors should be cautious of the Canadian dollar's surge and potential impact on USD-CAD.
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