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CANADA FX DEBT-Canadian dollar edges lower as focus turns to domestic GDP data
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CANADA FX DEBT-Canadian dollar edges lower as focus turns to domestic GDP data
May 26, 2026 10:07 AM

* Canadian dollar falls 0.1% against the greenback

* Trades in a range of 1.3800 to 1.3821 per U.S. dollar

* Price of oil declines 2.6%

* Bond yields rise across the curve

By Fergal Smith

TORONTO, May 26 (Reuters) - The Canadian dollar edged

lower against its U.S. counterpart on Tuesday as investors

weighed comments by a senior Bank of Canada policymaker and

looked ahead to quarterly GDP data at the end of the week.

The loonie was trading 0.1% lower at 1.3805 per U.S.

dollar, or 72.44 U.S. cents, after trading in a range of 1.3800

to 1.3821. On Friday, the currency touched a near six-week low

at 1.3824.

Economists expect first-quarter GDP data, due on Friday, to

show the economy growing at an annualized rate of 1.5%.

"The Canadian dollar remains stubbornly range-bound ahead of

Friday's first-quarter gross domestic product report, which is

expected to show the economy staging a relatively modest

recovery after contracting at the end of last year," Karl

Schamotta, chief market strategist at Corpay, said in a note.

"Paired with evidence of soft labour markets and weak

demand-led inflation, this growth backdrop should give the Bank

of Canada room to await clearer evidence of a shift in economic

direction before moving again."

Structural changes in the labor market were making the Bank

of Canada's job more complicated, Deputy Governor Nicolas

Vincent said, adding that if the central bank reacted wrongly,

inflationary pressures could rise.

Investors expect the BoC to leave its benchmark interest

rate on hold at 2.25% on June 10, swap market data showed.

The U.S. dollar rose against a basket of major currencies

and the price of oil clawed back some earlier declines to

trade 2.6% lower at $94.05 a barrel, as U.S. military strikes in

Iran added to uncertainty over whether a deal would be reached

soon to end the war.

Oil is one of Canada's major exports.

Canadian bond yields moved higher across the curve. The

10-year was up 1.7 basis points at 3.484% after

touching during Monday's session its lowest level since April 22

at 3.448%.

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