CANADA FX DEBT-Canadian dollar steadies near 18-month low as greenback posts broad-based gains

By Reuters News

By Fergal Smith

TORONTO, Oct 1 (Reuters) - The Canadian dollar steadied near an 18-month low against its US counterpart on Thursday, with the loonie performing better than most Group of Ten currencies as the greenback notched a broad-based advance.

The loonie was trading nearly unchanged at 1.4235 per US dollar, or 70.25 US cents, after touching its weakest intraday level since April 2025 at 1.4263. It follows eight straight daily declines for the currency, the longest such streak since May.

  • "I don't really think it's so much Canada. ... Nobody can keep up with the US," said Marc Chandler, chief market strategist at Bannockburn Capital Markets, adding that the greenback has benefited from elevated oil prices and a robust domestic economy.

  • New applications for US unemployment benefits drifted close to 57-year lows last week and layoffs decreased in September.

  • The US dollar added to recent gains against a basket of major currencies, as the US 10-year yield climbed to a 24-year high at about 5.34% before turning lower as investors stepped in.

  • "The US dollar's momentum is very stretched," Chandler said. "My sense is it just needs a little bit of a prick to pop it. And the prick has to come I think from lower interest rates."

  • US crude oil futures were trading 1.9% higher at $92.16 a barrel after China suspended oil products exports, potentially tightening fuel markets already coping with supply shortages globally.

  • Oil is one of Canada's major exports. Still, elevated energy prices as well as trade frictions weighed on Canada's manufacturing sector in September.

  • The ‌S&P Global Canada Manufacturing Purchasing Managers' Index fell to 51.5 last month from 53.0 in August, marking the lowest level since March.

  • Canadian government bond yields eased across the curve. The 10-year was down 7.3 basis points at 3.926%, after earlier touching its highest level since November 2023 at 4.042%.

  • Bank of Canada Senior Deputy Governor Carolyn Rogers is due to speak later in the day on Canada's housing market, with the text set for release at 3:05 p.m. ET (1905 GMT).

  • Investors see a 45% chance of an interest rate hike from the BoC this month, down from about 64% last week.

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