Canadian dollar falls 0.4% against the greenback
For the week, the currency was down 0.3%
Trades in a range of 1.4384 to 1.4461
Bond yields edge lower across the curve
TORONTO, Jan 3 (Reuters) – The Canadian dollar weakened against its U.S. counterpart on Friday and was set to extend a streak of weekly declines as investors weighed multiple headwinds for the commodity-linked currency, including a faltering Chinese economy.
The loonie was trading 0.4% lower at 1.4455 to the U.S. dollar, or 69.18 U.S. cents, moving closer to a near five-year low that it touched last month at 1.4467.
The currency traded in a range of 1.4384 to 1.4461, while it was on track for a weekly decline of 0.3%. That would be its sixth straight weekly decline, the longest such stretch since August 2023.
“Much of the Canadian dollar weakness in the last year has been U.S. dollar strength but that’s not the case today,” said Adam Button, chief currency analyst at ForexLive.
“As a global growth proxy, for the Canadian dollar to work in 2025 we need to see a resurgent China and China is struggling.”
Canada is a major commodities producer so the loonie tends to be sensitive to prospects for global growth.
China will sharply increase funding from ultra-long treasury bonds in 2025 to spur business investment and consumer-boosting initiatives, a state planner official said, as Beijing cranks up fiscal stimulus to revitalize the world’s second-biggest economy.
Additional headwinds for the loonie include the threat of U.S. tariffs on Canadian imports and political uncertainty, say analysts.
Canadian Prime Minister Justin Trudeau has been under increasing pressure to quit since his finance minister resigned on Dec. 16.
The U.S. dollar dipped against a basket of major currencies but was on track for its strongest weekly performance since early November on expectations that the U.S. economy will continue to outperform its peers globally this year.
Canadian bond yields edged lower across the curve. The 10-year was down 1 basis points at 3.211%. (Reporting by Fergal Smith; Editing by Alistair Bell)
