The Canadian dollar CADUSD steadied near an earlier one-week low against its U.S. counterpart on Wednesday as the greenback notched broad-based gains and ahead of domestic jobs data this week that could inform the timing of expected interest rate cuts.
The loonie was trading nearly unchanged at 1.3725 to the U.S. dollar, or 72.86 U.S. cents, after touching its weakest intraday level since May 1 at 1.3762.
“With no major macroeconomic data releases for traders to get their teeth into, the Canadian dollar is trading defensively against a still-strong greenback,” said Karl Schamotta, chief market strategist at Corpay.
“Friday’s Canadian jobs number looms as the next potential volatility catalyst, but even there markets are well prepared for a print that confirms continued (economic) underperformance relative to the United States.”
Canada’s employment report for April is expected to show the economy adding 18,000 jobs and the unemployment rate increasing to 6.2%.
The U.S. dollar gained for a third straight day against a basket of major currencies as investors bet on the U.S. economy outperforming peers.
More supportive of the loonie, the price of oil, one of Canada’s major exports, settled 0.8% higher at $78.99 a barrel after U.S. oil storage data showed a larger-than-expected draw in crude stockpiles.
Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 3.6 basis points at 3.630%, rebounding after it touched a near four-week low during Tuesday’s session at 3.555%.