The Canadian dollar has risen against the U.S. currency ahead of upcoming gross domestic product (GDP) data, and on news of a deal to lift the debt ceiling and avoid a costly default in America.
The loonie rose 0.2% higher to trade at 73.62 U.S. cents after declining for much of the past two weeks.
Canada’s latest GDP data is scheduled for release on May 31 and is expected to show that the economy grew at an annualized rate of 2.5% in this year’s first quarter.
Data on GDP typically moves markets and the Q1 number is expected to influence the June interest rate decision by the Bank of Canada.
Money markets see a roughly 30% chance that Canada’s central bank will raise its benchmark interest rate for the first time since January of this year at its next policy meeting.
At the same time, U.S. President Joe Biden and Republican House Speaker Kevin McCarthy announced a deal to prevent the U.S. from defaulting on its debt obligations for the first time in history.
Canadian government bond yields were mixed in trading, with the two-year touching its highest level since March 8 at 4.352%, while the 10-year was down 1.1 basis points at 3.322%.
