USD/CAD Touches Lowest Level Since Nov 2020

The USD/CAD pair is ending on North America session in the green territory by 0.8% following a final thrust to the upside in the US dollar. This development has taken the Canadian dollar to its lowest level since November 2020 amid rising concerns about the global economy and fears of anticipated recession that has weighed particularly heavily on commodity-linked currencies including the Canadian currency.

Bank of Canada Deputy Governor Toni Gravelle is due to speak on Thursday and there will be ears to the ground for US Fed speakers as well. On Monday, Minneapolis Fed President Neel Kashkari said the US central bank may not get as much aid from easing supply chains as it is hoping for in helping to cool inflation.

The price of oil, one of Canada’s major exports, settled 6.1% lower at $103.09bbls following yet further poor economic data out of the Middle Kingdom and considering that China’s two largest cities tightened COVID-19 curbs.


Atlanta Fed President Raphael Bostic said he doesn’t see the case for 75bps hikes yet. He already sees signs of peaking supply pressures and that should give the Fed room to hike at half-percentage-point interest rate increments for the next two to three policy meetings.

As for the Bank of Canada, money markets expect the central bank to raise its benchmark rate by half a percentage point for a second straight policy meeting on June 1. Meanwhile, Canadian government bond yields have pulled back from fresh multi-year highs, tracking the move in US Treasuries. The 10-year touched its highest since May 2011 at 3.173% before sliding to 3.028%, down 9.7 basis points on the day.