The Canadian dollar has climbed to its highest level in more than five weeks against the U.S.
dollar as the current account surplus turned positive and reached a 14-year high.
Canada’s dollar was trading 0.5% higher at 1.2657 to the U.S. dollar, or 79.01 U.S. cents, after
touching its strongest level since April 22 at 1.2651.
The current account surplus in Canada stood at $5 billion in the first quarter, swinging into
positive territory from a revised $137 million deficit in the fourth quarter of 2021. It was the
biggest surplus since the second quarter of 2008.
Canada's gross domestic product (GDP) data to be released today (May 31) could help guide
expectations for the Bank of Canada’s policy outlook.
Money markets expect the central bank to raise its benchmark interest rate by half a percentage
point for a second time at a policy meeting and decision scheduled for tomorrow (June 1).
Gains for the loonie come as the U.S. dollar loses ground against a basket of major currencies,
with investors betting on a possible economic slowdown as U.S. monetary policy tightens.
Canadian government bond yields were also higher across the board, with the 10-year up 3.5
basis points at 2.825%.
