Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

C$ rallies as current account surplus hits 14-year high

Published 05/30/2022, 03:15 PM
Updated 05/30/2022, 03:40 PM
© Reuters. 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//File Photo

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar rose to its highest level in more than five-weeks against the greenback on Monday, as data showed Canada's current account surplus turning positive and ahead of an expected interest rate hike this week by the Bank of Canada.

Canada's current account surplus was C$5.0 billion in the first quarter, swinging from a revised C$137 million deficit in the fourth quarter. It was the widest surplus since the second quarter of 2008.

"We expect the ongoing strength in commodities to support the current account in Q2 (second quarter), though offset by a deeper services deficit as travel recovers more fully," said Shelly Kaushik, an economist at BMO Capital Markets.

Canada's GDP data, due on Tuesday, could help guide expectations for the Bank of Canada policy outlook. Money markets expect the central bank to raise its benchmark rate by half a percentage point for a second straight time at a policy decision on Wednesday.

The Canadian dollar was trading 0.5% higher at 1.2657 to the greenback, or 79.01 U.S. cents, after touching its strongest since April 22 at 1.2651.

Gains for the loonie came as world share markets rose and the U.S. dollar lost ground against a basket of major currencies, with investors betting on a possible slowdown in U.S. monetary tightening.

The price of oil, one of Canada's major exports, was up 1.8% at $117.17 a barrel as China eased COVID-19 restrictions and traders priced in expectations that the European Union will eventually reach an agreement to ban Russian oil imports.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Canadian government bond yields were higher across the curve, with the 10-year up 3.5 basis points at 2.825%.

(The story removes 8th paragraph showing incorrect move in oil prices.)

Latest comments

now u know why they supported Ukraine to fight Russia and same with Joey!
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.