The Canadian dollar CADUSD edged lower against its U.S. counterpart on Thursday but clawing back some of its earlier decline, as investors continued to assess hawkish Federal Reserve minutes and data showed Canadian exports climbing to a record high.
Stock markets globally were deep in the red and some key government bond yields climbed to their highest in years after the Fed on Wednesday signaled the possibility of faster-than-expected U.S. interest rate hikes and stimulus withdrawal.
Canada posted a trade surplus of C$3.1-billion in November, the largest since September 2008, helped by a 3.8 per cent increase in exports.
Canada’s employment report for December, due on Friday, could offer further clues about the strength of the domestic economy.
Since December, some Canadian provinces have announced restrictions to help contain the spread of the Omicron coronavirus variant.
The Canadian dollar was trading 0.1 per cent lower at 1.2761 to the greenback, or 78.36 U.S. cents, after touching its weakest level since Dec. 29 at 1.2813.
The price of oil, one of Canada’s major exports, was supported by escalating unrest in OPEC+ oil producer Kazakhstan and supply outages in Libya. U.S. crude prices were up 2.30 per cent to $79.64 a barrel.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year touched its highest level since Nov. 26 at 1.695 per cent before dipping to 1.678 per cent, up 3.3 basis points on the day.
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