A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto January 23, 2015. The Canadian dollar strengthened against the U.S. dollar on Friday after Canadian CPI data showed an increase in core inflation. REUTERS/Mark Blinch (CANADA – Tags: BUSINESS)
February 25, 2022
TORONTO (Reuters) – The Canadian dollar strengthened against the greenback on Friday as preliminary domestic data showed wholesale trade rising in January and currency traders walked back some of the large moves seen the day before in reaction to Russia’s invasion of Ukraine.
The safe-haven U.S. dollar fell against a basket of major currencies, and stocks globally rose as investors welcomed coordinated Western sanctions on Russia that targeted its banks but not did not block it from a global payments system and left its energy sector largely untouched.
The price of oil, one of Canada’s major exports, gave back some recent gains, with U.S. crude oil futures falling 1.1% to $91.76 a barrel.
Investors doubt that the start of war in Ukraine will stop the Bank of Canada from hiking interest rates next week for the first time since October 2018.
Money markets expect the central bank to lift its policy rate by 25 basis points to 0.50% at its policy announcement next Wednesday and six times in total this year to fight inflation.
Canadian wholesale trade was up 3.9% in January from December, on higher sales in building material and supplies, along with machinery equipment and supplies, a flash estimate from Statistics Canada showed.
The Canadian dollar gained 0.3% to 1.2775 per greenback, or 78.28 U.S. cents, after trading in a range of 1.2754 to 1.2820.
On Thursday, the currency touched its weakest intraday level in more than two months at 1.2877. It was on track to decline 0.2% for the week.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries.
The 10-year rate rose 2.2 basis points to 1.942% but holding below the three-year high notched last week at 1.995%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
Source: One America News Network
