Canadian Dollar Steadies as Oil Prices Lift Rate Bets
The loonie steadied as oil rose to $106.88. Markets increased rate bets after the Bank of Canada warned that high energy costs could drive up inflation.
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Canada saw its currency steady at 1.3685 per USD/CAD on Wednesday afternoon as rising oil prices fueled interest rate hike expectations. Markets now price in 59 basis points of tightening this year, up from 39 basis points before the central bank decision. Sustained energy costs above $100 per barrel may force the Bank of Canada into consecutive rate increases to curb inflation.
