CANADA FX DEBT-Canadian dollar outperforms G10 peers as oil prices jump
By Fergal Smith
TORONTO, March 6 (Reuters) - The commodity-linked Canadian dollar strengthened to a three-week high against its U.S. counterpart on Friday as oil prices jumped and U.S. employment data fell short of expectations.
The loonie CAD= was trading 0.7% higher at 1.3578 per U.S. dollar, or 73.65 U.S. cents, its strongest level since February 12.
For the week, the currency was up 0.5%, as soaring oil prices driven by the Middle East conflict offset safe-haven demand for the greenback.
The loonie posted sharper weekly gains against the other G10 currencies, particularly those of oil importers. Against the euro EUR=, it was up 2.2%, marking its biggest weekly advance since February 2022.
The price of oil settled 12.2% higher at $90.90 a barrel on Friday as the conflict kept shipping and energy exports through the vital Strait of Hormuz halted.
Oil is one of Canada's major exports so the price increase could boost Canada's economy as well as government tax revenue.
"Taken along with the prospects that the Iran conflict is widening and timelines extending, that’s a boost to Canadian treasuries," said Amo Sahota, director at Klarity FX in San Francisco.
"Then of course we have the shapeshifting in U.S. rate projections this week as traders assess higher U.S. inflation risks as well as a disappointing jobs report."
The U.S. economy unexpectedly shed jobs in February and the unemployment rate increased to 4.4%, potentially hinting at a deterioration in labor market conditions that could put the Federal Reserve in a difficult spot amid rising oil prices.
The U.S. dollar .DXY gave back some recent gains against a basket of major currencies and U.S. Treasury yields eased.
Canadian economic data was upbeat. The seasonally adjusted Ivey Purchasing Managers Index rose to 56.6 last month from 50.9 in January, posting its highest level since September.
The Canadian 10-year yield CA10YT=RR was up 4.7 basis points at 3.406%, while the gap between it and the equivalent U.S. rate narrowed by 4.9 basis points to 73.8 basis points in favor of the U.S. note.
Related Articles
Is the Market No Longer ‘Buying Asia’? Why Asian Stocks Face Selloff Amid US-Iran Conflict While US Stocks Become a Safe Haven?
Has the "Sell US, Buy Asia" trade, once prevalent at the beginning of the year, now become obsolete? Will the U.S.-Iran conflict fundamentally reverse the robust 2026 rally in emerging markets?
Is the Market No Longer ‘Buying Asia’? Why Asian Stocks Face Selloff Amid US-Iran Conflict While US Stocks Become a Safe Haven?
Has the "Sell US, Buy Asia" trade, once prevalent at the beginning of the year, now become obsolete? Will the U.S.-Iran conflict fundamentally reverse the robust 2026 rally in emerging markets?Investing in GameStop 2026: Holding Company Transformation or Just More Hype?
Although GameStop still has physical stores, it is predominantly looking to buy/build out new businesses that can expand more quickly than it is shrinking traditional video game retail stores, which are going to disappear.
It’s Not Gold Soaring; It’s Paper Money Shrinking: Measuring Gold with Five Real-World Yardsticks
TradingKey – Want to know where gold’s true level really is? This article measures it against stocks, the US dollar, housing, oil and even burgers to show where its price really stands today.
2026 Evolution of Global Payment Industry Landscape: PayPal’s Defensive Transformation and the Rise of AI Agent Settlement Infrastructure
An in-depth analysis of 2026 PayPal M&A rumors and Stripe competitive insights, exploring fundamental transformations in stablecoin settlement within the AI Agent era. Incorporating the latest earnings data from Circle (CRCL) and Block (SQ), this report provides investors with deep value analysis of the U.S. fintech sector and logical deductions for digital clearing frameworks.
