Canadian dollar nears 2020 lows as rate cut bets surge [Wealth Professional (Canada)]
Bank Of Montreal (BMO)
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Source: Wealth Professional
Canada's dollar approached its weakest level this year, and bond yields declined as unemployment surged, prompting traders to increase bets on a half-point interest rate cut next week, as per BNN Bloomberg On Friday, the loonie dropped 1 percent against the US dollar to $1.4165, nearing its lowest level since April 2020 and hovering close to its weakest level this year. Two-year Canadian government bonds led a rally across maturities, with the yield on the policy-sensitive tenor falling 15 basis points to 2.89 percent, the lowest since September. Swaps traders raised their expectations for an outsized interest rate reduction from the Bank of Canada (BoC) on December 11 to roughly an 80 percent chance, compared to a 50-50 probability earlier this week. All six of Canada's largest banks now predict a 50-basis-point cut in borrowing costs. Data released on Friday showed Canadian employers added 51,000 jobs in November, while the unemployment rate climbed to 6.8 percent — the h
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