Key Moments
- USD/CAD closed at 1.37 as the Canadian Dollar outperformed the US Dollar by 0.28% among G10 currencies.
- Higher oil prices coincided with a move higher in US Treasury yields, with the 2-year up 1.2bp and the 10-year up 2.2bp.
- Investors are watching upcoming Canadian data on March housing starts and February international securities transactions ahead of the USMCA review period.
CAD Outpaces USD in G10 FX Trade
Rabobank strategist Molly Schwartz noted that while the US Dollar (USD) ranked as the third-strongest performer in the G10 currency complex, the Canadian Dollar (CAD) delivered an even stronger showing. This relative outperformance pushed USD/CAD down to 1.37, underscoring the Canadian currency’s strength over the session.
According to Schwartz, CAD outperformed USD by 0.28% as the pair settled at 1.37 by the close of trading, confirming CAD’s leading role within the G10 on the day.
Yield Curve Moves and Oil Price Support
Schwartz linked some of the market action to developments in the rates space and commodity markets, pointing to the impact of oil and US Treasury yields on trading conditions.
She wrote: “Higher oil prices yesterday supported higher US Treasury yields, with a slight steepening bias, with the 2 year closing up 1.2bp and the 10 year up 2.2bp.”
In this environment, USD still gained relative to most major peers, but CAD’s stronger performance placed it ahead of the US currency within the G10 basket.
| Market Indicator | Move / Level | Comment |
|---|---|---|
| USD performance in G10 | Third best performing | Still outpaced by CAD |
| CAD performance vs USD | Outperformed by 0.28% | USD/CAD closed at 1.37 |
| US 2-year Treasury yield | Up 1.2bp | Part of slight curve steepening |
| US 10-year Treasury yield | Up 2.2bp | Supported by higher oil prices |
Trade Policy Backdrop Ahead of USMCA Review
Beyond market moves, Schwartz drew attention to remarks from Canadian Trade Minister Dominic LeBlanc regarding ongoing trade discussions and sector-specific tensions.
“Yesterday, Canadian Trade Minister Dominic LeBlanc said that “if [Canada] is going to resolve some of these issues that Ambassador Greer referred to, Canada is ready and willing to do that work.” Such “issues” include long-standing conflicts about Canada’s “supply-managed” dairy industry. As we head into the USMCA review period this summer, Greer will also be heading to Mexico City this upcoming Monday.”
These comments framed the broader policy environment in which CAD is trading, particularly given the focus on trade disputes and the upcoming USMCA review process.
Upcoming Canadian Data: Housing and Capital Flows
Schwartz also pointed to upcoming Canadian macroeconomic releases as data points that market participants may monitor.
“Canada will report March housing starts with expectations for 258,000 units compared to the prior reading of 250,900. International securities transactions data for February will follow, with the previous month showing CAD 46.73b.”
These figures on residential construction activity and cross-border securities flows are set against the backdrop of CAD’s recent strength and the evolving trade and yield environment.
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