Canadian dollar hits one-month low as greenback shines

In this photo illustration U.S. Dollar and Canadian Dollar banknotes. (Photo Illustration by Cezary Kowalski/SOPA Images/LightRocket via Getty Images)

TORONTO - The Canadian dollar weakened to a one-month low against its U.S. counterpart ‌on Friday, as the greenback posted broad gains and bond yields globally jumped on rising concerns about the inflation outlook.

The loonie was trading 0.1 per cent lower at 1.3735 per U.S. dollar, or 72.81 U.S. ​cents, after touching its weakest intraday level since April 15 at 1.3767.

• Latest economic news on BNNBloomberg.ca

The ​currency was on track for its eighth straight daily decline, which ⁠would be the longest such streak since January. For the week, the loonie was ​down 0.4 per cent.

“The big story this week is the surge in the U.S. dollar,” said ​Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. “We have seen the (U.S.) economy reaccelerate, high price pressures and the market has shifted.”

The U.S. dollar added to recent gains against a basket of ​major currencies as market expectations for the path of monetary policy from the Federal ​Reserve continued to shift towards possible rate hikes.

“Technically, the U.S. dollar looks strong ... I think there ‌will ⁠be follow-through U.S. dollar buying,” Chandler said, targeting 1.3810 in USD-CAD, which is a major retracement level and the 200-day moving average.

The price of oil, one of Canada’s major exports, rose 3.9 per cent to US$105.10 a barrel on reduced hopes of a deal to end ​ship attacks and seizures ​around the Strait ⁠of Hormuz.

The Bank of Canada has said that if oil prices stay high and begin to push up inflation, it might ​have to respond with consecutive interest rate hikes. Canada’s inflation report ​for April ⁠is due on Tuesday.

• Latest updates on investing here

Domestic data on Friday showed that housing starts rose more than expected in April, jumping 17 per cent from the previous month, and factory sales were up three per cent month-over-month in ⁠March.

Canadian ​bond yields rose along the curve, tracking moves in U.S. ​Treasuries, in a shortened session ahead of Monday’s market holiday for Victoria Day. The 10-year was up 13 ​basis points at 3.700 per cent, marking its highest level since May 2024.

Reporting by Fergal Smith