The Canadian dollar CADUSD weakened for an eighth straight day against its U.S. counterpart on Friday as oil prices fell and after the Bank of Canada cut interest rates further earlier in the week.
The loonie was trading 0.1 per cent lower at 1.3835 per U.S. dollar, or 72.28 U.S. cents. Earlier in the session, the currency touched 1.3848, matching the eight-month low that was set on Thursday.
The daily losing streak was the longest since December 2018. For the week, it was down 0.7 per cent.
“A pretty quiet end to the week, but the continued decline in WTI crude oil prices and CAD weakness on the crosses have been catalysts to push USD-CAD higher today,” said George Davis, chief technical strategist at RBC Capital Markets.
“This year’s prior high from mid-April at 1.3846 has been able to cap rallies (in USD-CAD) so far, with the market keeping a close eye on this level into next week.”
The price of oil, one of Canada’s major exports, settled 1.4 per cent lower at $77.16 a barrel on declining Chinese demand and hopes of a Gaza ceasefire agreement.
On Wednesday, the BoC lowered its benchmark rate for a second straight month, cutting by 25 basis points to 4.50 per cent.
The central bank is shifting its focus to boosting the economy rather than suppressing inflation, which raises prospects of additional easing in the coming months, analysts say.
Investors see a roughly 70 per cent chance of a rate cut at the next policy announcement in September.
Canadian bond yields fell across the curve, tracking moves in U.S. Treasuries after U.S. data showed prices rising modestly in June, supporting bets the Federal Reserve would begin its easing cycle in the coming months.
The 10-year was down 5 basis points at 3.324 per cent, trading at nearly its lowest level in one month.
