The Canadian dollar holds steady, benchmark government bond yields rise in tandem with US Treasuries

(1) On Tuesday, the Canadian dollar was little changed against the US dollar, trading around 1.3873, with intraday fluctuations in a narrow range between approximately 1.3862 and 1.3878. (2) The yield on Canada's ten-year benchmark government bonds rose about 1.3 basis points to 3.735%, while the yield on US ten-year Treasury bonds climbed to around 4.734% over the same period, resulting in a slight widening of the interest rate differential. (3) Data from the Canada Mortgage and Housing Corporation show that new housing starts in July dropped to about 229,000 units, lower than the previous month's revised figure of 241,000 units and below the institutional survey expectation of 248,000 units. (4) The weak new housing starts data stands in contrast to the recent upward trend in global bond yields, but the Canadian dollar reacted mildly after the release, with the market's focus remaining on commodity prices and trade policy developments. (5) On the day, September crude oil futures in the US rose by about $0.7 to above $85 per barrel, and higher oil prices provided some underlying support for the Canadian dollar. Investors will continue to monitor developments in US-Canada trade negotiations for potential impacts on the exchange rate.