{"id":46141,"date":"2026-06-09T14:41:55","date_gmt":"2026-06-09T14:41:55","guid":{"rendered":"https:\/\/www.vtmarkets.com\/en\/uncategorized\/canadian-dollar-lags-reserve-peers-as-yield-gap-and-gold-slump-keep-usd-cad-near-1-39\/"},"modified":"2026-06-09T14:41:55","modified_gmt":"2026-06-09T14:41:55","slug":"canadian-dollar-lags-reserve-peers-as-yield-gap-and-gold-slump-keep-usd-cad-near-1-39","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-latam\/live-updates\/canadian-dollar-lags-reserve-peers-as-yield-gap-and-gold-slump-keep-usd-cad-near-1-39\/","title":{"rendered":"Canadian dollar lags reserve peers as yield gap and gold slump keep USD\/CAD near 1.39"},"content":{"rendered":"National Bank of Canada says the Canadian dollar has recently been the weakest-performing reserve currency, with USD\/CAD returning to about 1.39, a level last seen at the end of March during the equity sell-off that followed the closure of the Strait of Hormuz. The bank links the move to softer relative real growth and a negative Canada\u2013U.S. 2-year spread, which continues to weigh on the currency even as full-time employment sits at a record high.\n\nCommodities are also shaping price action. Oil remains relevant for Canada, but the bank argues gold has been the marginal driver in the current set-up; bullion is in a downtrend and is now more than 17% below its recent record high, a dynamic it associates with CAD weakness. Looking ahead, it projects USD\/CAD at 1.35 by year-end, and says any durable CAD recovery would depend on Ottawa securing a trade accord with the US this summer, while geopolitical risks and Canadian firms\u2019 access to the US market remain sources of uncertainty.\n\n

Economic And Yield Divergence Fuels Loonie Weakness<\/h3>\n\nWe see the Canadian dollar remaining under pressure in the coming weeks, holding as the weakest reserve currency with USD\/CAD hovering near 1.39. The economic picture supports this, as Canada’s Q1 2026 GDP growth was reported last week at a sluggish 0.5%, a stark contrast to the robust 2.8% growth seen in the United States. This divergence is a key reason we expect the trend to continue.\n\nThe interest rate spread between Canada and the U.S. is a major headwind for the loonie. As of this morning, the yield on the U.S. 2-year bond is a full 65 basis points higher than its Canadian equivalent, making the U.S. dollar more attractive for investors seeking yield. Historically, such a wide negative spread, similar to the period in 2017-2019, has consistently applied downward pressure on the Canadian dollar.\n\n

Commodities, Gold, And Trade Uncertainty Impact Outlook<\/h3>\n\nGold has also become a more critical driver for the currency than oil in the current market. Bullion is down more than 17% from its recent record high, now trading around $2,450 per ounce and struggling to find support. We believe any further weakness in gold will directly translate into a higher USD\/CAD rate.\n\nGiven this backdrop, we feel that derivative traders should consider positioning for continued Canadian dollar weakness. Buying call options on USD\/CAD for late summer expirations seems like a sensible strategy to profit from a potential move higher, especially with uncertainty around a new U.S. trade accord. A sustained rally for the loonie will likely require a significant breakthrough in those trade negotiations, which we do not see as imminent.\n\n\n

Start trading now \u2014 click here<\/a> to create your real VT Markets account.<\/b><\/p>","protected":false},"excerpt":{"rendered":"

National Bank says loonie weakest reserve currency; 1.39 USD\/CAD driven by growth, yields, gold slump, trade risks.<\/p>\n","protected":false},"author":87,"featured_media":45425,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[41],"tags":[],"class_list":["post-46141","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/posts\/46141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/users\/87"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/comments?post=46141"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/posts\/46141\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/media\/45425"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/media?parent=46141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/categories?post=46141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-latam\/wp-json\/wp\/v2\/tags?post=46141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}