Rabobank strategist Molly Schwartz reports that the Canadian Dollar (CAD) outperformed the US Dollar (USD), resulting in the USD/CAD pair closing at 1.37, a 0.28% gain for the CAD over the USD. This move reflects the CAD's position as the best-performing G10 currency on the day, while the USD was the third best performer among G10 currencies [1]. The outperformance was attributed to higher oil prices, which supported higher US Treasury yields, with the 2-year yield closing up 1.2 basis points and the 10-year yield up 2.2 basis points, indicating a slight steepening bias [1].
Additionally, Canadian Trade Minister Dominic LeBlanc commented on ongoing efforts to resolve trade issues, specifically referencing disputes over Canada’s supply-managed dairy sector. These discussions are taking place ahead of the USMCA review period scheduled for this summer, with further talks set to occur in Mexico City the following Monday. LeBlanc stated that Canada is 'ready and willing to do that work' to address these issues [1].
Looking ahead, Canada is set to 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 also be released, with the previous month showing CAD 46.73 billion [1].
CONCLUSION
The Canadian Dollar's outperformance against the US Dollar was driven by yield dynamics and positive sentiment around trade negotiations. Upcoming economic data releases and continued trade talks may further influence the USD/CAD pair in the near term.