Market News

C$ climbs to 5-week high on 'massive' short covering - REUTERS

MARCH 30, 2023

  • Canadian dollar strengthens 0.2% against the greenback
  • Touches its strongest level since Feb. 23 at 1.3517
  • Price of U.S. oil settles 1.9% higher
  • Bond yields trade mixed across a flatter curve

TORONTO, March 30 (Reuters) - The Canadian dollar strengthened to a five-week high against its U.S. counterpart on Thursday as a recovery in risk appetite raised pressure on speculators that had added to their bearish bets on the currency in recent weeks.

The loonie was trading 0.2% higher at 1.3525 to the greenback, or 73.94 U.S. cents, after touching its strongest level since Feb. 23 at 1.3517. The currency is on track to gain 0.9% for the month.

"We are seeing massive short covering from the hedge fund community," said Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull.

"Going into that banking crisis a few weeks ago, a lot of speculators got short the Canadian dollar."

Data from the U.S. Commodity Futures Trading Commission shows that speculators have raised their bearish bets on the loonie to the most since January 2019.

Stock indexes globally rose and the safe-haven U.S. dollar declined against a basket of major currencies on easing fears about banking sector troubles, encouraging economic signs from the chip industry and rising oil prices.

Oil, one of Canada's major exports, settled 1.9% higher at $73.47 a barrel, supported by lower U.S. crude stockpiles and a halt to exports from Iraq's Kurdistan region.

Canadian GDP data for January, due on Friday, could offer clues on the strength of the domestic economy. Analysts expect an increase of 0.3% from December.

Canadian government bond yields were mixed across a flatter curve, with the 10-year easing nearly 2 basis points to 2.923%.

Reporting by Fergal Smith; editing by Jonathan Oatis and Paul Simao


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics