The Canadian dollar fell against its broadly stronger U.S. counterpart on Wednesday, pulling back from an earlier nine-day high, as investors worried about global growth prospects and the Federal Reserve stayed on course to hike interest rates in June.
At 4 p.m., the Canadian dollar was trading 0.2 per cent lower at $1.2879 to the greenback, or 77.65 U.S. cents.
The currency touched its strongest level since April 23 at $1.2803, while its weakest was $1.2889. It hit on Tuesday its weakest point in more than three weeks at $1.2914.
“It is an extension of the position-squaring theme that we have seen play out,” said Bipan Rai, North America head, FX strategy, at CIBC Capital Markets. “It seems to be this concern about global growth and whether or not it truly is synchronous.”
Doubts about the strength of growth outside the United States have helped boost the U.S. dollar recently against a basket of major currencies.
The greenback climbed to its highest level in more than four months as the Fed held interest rates steady and expressed confidence that a recent rise in inflation to near the U.S. central bank’s target would be sustained.
“June still remains very much in play when it comes to the Fed,” Rai said.
U.S. crude prices settled 1 per cent higher at $67.93 a barrel. Oil is one of Canada’s major exports.
Canadian government bond prices were lower across a steeper yield curve, with the two-year down 1 cent to yield 1.935 per cent and the 10-year falling 19 cents to yield 2.363 per cent.
The 10-year yield touched its highest intraday since Feb. 15 at 2.387 per cent.
Canada’s trade data for March is due on Thursday.