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CANADA FX DEBT-C$ slides after hotter-than-expected U.S. inflation data

CANADA FX DEBT-C$ slides after hotter-than-expected U.S. inflation data

Reuters · 09/13/2022 09:42
CANADA FX DEBT-C$ slides after hotter-than-expected U.S. inflation data

Canadian dollar weakens 0.7% against the greenback

Touches its strongest intraday since Aug. 26 at 1.2955

Price of U.S. oil falls 0.3%

Canadian bond yields rise across curve

- The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from its highest level in three weeks, as U.S. inflation data bolstered bets that the Federal Reserve would continue to tighten aggressively.

Equity markets globally .WORLD fell and the greenback .DXY jumped as U.S. consumer prices unexpectedly rose in August from July, cementing bets of a third straight 75-basis-point interest rate hike from the Federal Reserve week.

The price of oil, one of Canada's major exports, reversed earlier gains, with U.S. crude futures CLc1 down 0.3% at $87.54 a barrel.

The Canadian dollar CAD= was trading 0.7% lower at 1.3083 to the greenback, or 76.44 U.S. cents, after earlier touching its strongest since Aug. 26 at 1.2955.

Meanwhile, bets rose that the Bank of Canada would raise its benchmark interest rate by 50 basis points rather than 25 basis points at its policy decision on Oct. 26. 0#BOCWATCH

The central bank hiked by 75 basis points last week, lifting rates to a 14-year high of 3.25%.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 2-year CA2YT=RR jumped 10.2 basis points to 3.705%, while the 10-year CA10YT=RR was up 4.7 basis points at 3.191%.


(Reporting by Fergal Smith; editing by Jonathan Oatis)

((fergal.smith@thomsonreuters.com; +1 647 480 7446;))