FILE PHOTO: A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto, January 23, 2015. REUTERS/Mark Blinch (CANADA – Tags: BUSINESS)/File Photo
February 23, 2022
TORONTO (Reuters) – The Canadian dollar strengthened against its U.S. counterpart on Wednesday as global financial markets grew more calm after they were pressured at the start of the week by escalating Russia-Ukraine tensions.
Global stocks broke a four-day slide and demand for safe-haven assets waned, with investors waiting to see Russian President Vladimir Putin’s next move after he sent troops into separatist regions of Ukraine.
The United States and its allies unveiled more sanctions against Russia, while making clear they were keeping tougher measures in reserve in case of a full-scale invasion by Moscow.
Sanctions were not yet expected to disrupt oil supplies, helping to cap the price of oil, one of Canada’s major exports, after it notched a seven-year high on Tuesday. U.S. crude prices dipped 0.2% to $91.70 a barrel.
The Canadian dollar was up 0.6% at 1.2691 to the greenback, or 78.80 U.S. cents, after trading in a range of 1.2683 to 1.2771.
Other commodity-linked currencies also gained ground, including a 5-week high for the New Zealand dollar as the country’s central bank hiked interest rates as expected and signaled a more aggressive path forward than even the most hawkish investor had wagered.
The Bank of Canada is expected to hike next Wednesday for the first time since October 2018.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year rose 4.4 basis points to 1.970%, approaching last Wednesday’s three-year high at 1.995%.
(Reporting by Fergal Smith; Editing by Alexandra Hudson)
Source: One America News Network
