Protracted tensions between Russia and Ukraine have further exacerbated risks in the market to the point of pushing safe-haven demand higher and at the same time causing crude oil prices to continue to soar. The Canadian dollar strengthened against the US dollar on Tuesday as one of Canada's major exports, oil, saw a price spike.
Oil prices hit their highest level since 2014 after Moscow ordered troops into two provinces in eastern Ukraine that indirectly added to supply concerns. U.S. crude oil prices rose 3.4% to $ 94.15 a barrel, while the Canadian dollar rose 0.2% against the U.S. dollar to a trading level of 1.2722 or 78.60 U.S. cents after trading between 1.2719 and 1.2769.
Yet speculators have reduced their bullish bets on the Canadian dollar based on data findings from the U.S. Commodity Futures Commission. As of February 15, long positions had decreased to 12,170 contracts from 14,886 in the previous week.
Meanwhile, the Canadian parliament has backed Prime Minister Justin Trudeau’s decision to use rarely used emergency powers to end Covid-19-related protests resulting in roadblocks in the capital Ottawa for more than three weeks.
Canadian government bond yields jumped higher with 10 -year bonds rising 4.6 basis points to 1.922%, moving back on seeing a three -year high recorded last Wednesday at 1.995%.
