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Canadian dollar weakens to two-month lows versus US dollar

USD/CAD climbed above 1.4100 for the first time in two months, as US Treasury yields surged to their highest levels in more than 20 years and markets increased bets on Fed tightening.

Reported · Written up by our desk · Major Pairs

FXStreet reports the Canadian dollar extended losses for a fourth straight day against the US dollar on Thursday, with USD/CAD rising above 1.4100 for the first time in two months and nearing late-July levels around 1.4130.

The outlet attributes the move to surging US Treasury yields and growing expectations the Federal Reserve will keep tightening, a combination that is lifting the greenback while raising concerns that higher borrowing costs could strain mortgages, credit cards, and corporate loan demand.

FXStreet also notes that moderate risk aversion is weighing on the Canadian dollar, partly offset by a rebound in oil prices. Brent moved back toward the $100 level after US and Iran representatives failed to reach an agreement at the UN General Assembly in New York, reducing hopes for any near-term reopening of the Strait of Hormuz.

Looking ahead, FXStreet says attention will turn to Canada’s July retail sales, expected to fall 0.8% after June’s 0.6% gain, while US investors monitor weekly initial jobless claims and remarks from Federal Reserve officials Anna Paulson and Beth Hammack.

Latest closeBrent $97.67 ▼1.6%

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