TORONTO (Reuters) – The Canadian dollar edged higher against the U.S. dollar on Wednesday, rebounding from its lowest level in nearly eight weeks as investor sentiment recovered from the Bank of Canada Raise interest rates to year highs.
Canadian dollar at 1.3135 against the US dollar up 0.1%, or 244 .13 cents after hitting its lowest point since July 244 at 1.3208.
“We saw a strong rally in the Canadian dollar today, not so much because of Canada The central bank expects a rate hike 13 bp, rather than a broad dollar sell-off against a constructive risk backdrop,” Silver Gold Bull Forex and Erik Bregar, Director of Precious Metals Risk Management.
U.S. stock indexes climbed after a recent sell-off on falling bond yields. In contrast, oil prices fell to their lowest levels since Russia’s February invasion of Ukraine, falling 5.7% to the dollar 76.76 A bucket.
Oil is one of Canada’s major oil exports.
Bank of Canada raises benchmark interest rate by three-quarters of a percentage point to 3. %, as expected, and signaled that its most aggressive tightening in decades is not yet complete as it struggles to rein in inflation.
Currency markets are expected to be around 50 basis points for further tightening by the end of the year 2022..
“It does feel as if the bank is preparing the market for a meeting or two where rates may need to continue higher,” said TD Securities chief Canadian strategist Andrew Kelvin said.
The Canadian bond yield curve has flattened, following that of U.S. Treasuries. – down 7.7 basis points year over year to 3.76%, hitting its highest intraday level in nearly two months on Tuesday at 3.244%.