strengthened against its U.S. counterpart on Friday as oil prices rose and the market took stock of recent losses for the currency, but the move was limited following the recent move in yield spreads in favour of the greenback.
Still, it was trading not far from a five-month low that it hit on Tuesday, at 1.3846, following the release of softer-than-expected domestic consumer price index data. The slowdown in Canadian inflation has contrasted with the recent heating up of U.S. price pressures, raising bets the Bank of Canada would begin easing interest rates before the Federal Reserve.
The gap between Canada’s 2-year yield and the U.S. equivalent has widened to 73 basis points in favour of the U.S. note from 45 basis points at the start of the month.