Canadian dollar hits three-week low on broad-based USD strength
The Canadian dollar CADUSD fell to a three-week low against its U.S. counterpart on Thursday as the Federal Reserve's patient stance on easing boosted the greenback and after the Bank of Canada said a lengthy trade war could put financial stability at risk.
The loonie was trading 0.7% lower at 1.3930 per U.S. dollar, or 71.79 U.S. cents, after touching its weakest intraday level since April 16 at 1.3930.
Fed Chair Jerome Powell on Wednesday signaled that the central bank was effectively sidelined until the Trump administration's sweeping policy agenda takes full effect.
'The CAD weakness today is in line with broad USD strength after a relatively hawkish Fed meeting yesterday,' said Jayati Bharadwaj, a global FX strategist at TD Securities. 'Powell signaled caution and no hurry to resume the easing cycle.'
The U.S. dollar gained against a basket of major currencies, with market nerves calmed by news of a trade deal between the United States and Britain.
Canada sends about 75% of its exports to the United States, including oil. U.S. crude futures were up 3.1% at $59.87 a barrel on hopes for a breakthrough in looming trade talks between the U.S. and China.
A prolonged trade war could increase the risks to Canadian financial stability by hurting banks and other institutions and making it harder for households and businesses to pay down debt, the BoC said.
Canadian employment data for April, due on Friday, could shed light on the trade war's impact on the domestic economy. The median forecast is for a modest jobs gain of 2,500 and for the unemployment rate to edge up to 6.8% from 6.7% in March.
Canadian bond yields rose across the curve, tracking moves in U.S. Treasuries. The 10-year was up 10 basis points at 3.200%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
35 minutes ago
- Globe and Mail
The Smartest Growth Stock to Buy With $10 Right Now
Buying and holding onto solid companies with disruptive potential can be a winning, long-term strategy for investors. Their potential to grow at a faster pace than their peers sets the stage for impressive stock market gains. SoundHound AI (NASDAQ: SOUN) is one such company. Its artificial intelligence (AI) voice solutions are changing how clients handle food ordering, e-commerce, customer service, healthcare, and other functions. Each share of SoundHound is trading below $10 as of this writing, so if you have $10 to spare, here's why you should tap into this promising growth stock. SoundHound is winning market share in a fast-growing industry SoundHound offers multiple voice AI products, allowing customers to build custom solutions for their businesses. The company's AI agents can speak, think, and act autonomously while interacting with customers, whether it's in the drive-thru lane of a restaurant or on a company's customer service line. Importantly, SoundHound is not just winning over new customers but also gaining more business from existing ones. In its first-quarter report, management detailed new integrations of its voice AI solutions across multiple industries, and it also announced expanded partnerships with existing clients. What's more, the company's Autonomics AI operations platform was named a leader in its segment by technology research and advisory firm ISG Research. The strength of SoundHound's offerings explains why the company has been able to quickly expand its customer base. Best of all, the market in which SoundHound operates is still in its early stages. Venture capital firm Andreessen Horowitz estimates the voice AI market increased 25% last year to $5.4 billion. SoundHound's 2024 revenue growth of 85% is a clear sign the company is outpacing the market overall. And for 2025, Andreessen Horowitz is expecting a 61% spike in the voice AI market to $8.7 billion. Meanwhile, SoundHound is guiding for full-year revenue to double at the midpoint of its guidance range of $157 million to $177 million. The stock has terrific long-term growth potential Based on the above projections, SoundHound could end 2025 with a 2% market share, and the voice AI opportunity will continue to expand with one estimate calling for 32% compound annual growth through 2032, when it will be a $40 billion annual market. If SoundHound's market share jumps to 10% of that 2032 forecast, its annual revenue would reach $4 billion. This level of growth is likely in the ballpark of what investors expect for this AI stock, which explains its expensive valuation. SoundHound is trading at 35 times trailing revenue as of this writing. Following its recent slide, SoundHound can still be a solid pick for growth-hungry investors with a long-term mindset. However, anyone buying into the stock must be prepared to look past near-term volatility and give the company time to capitalize on its huge market opportunity. Should you invest $1,000 in SoundHound AI right now? Before you buy stock in SoundHound AI, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoundHound AI wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor 's total average return is789% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025
Global News
36 minutes ago
- Global News
Bank of Canada's head says rate pause a result of ‘shock-prone' world
Tiff Macklem is wearing an Edmonton Oilers pin as he reflects on coming very close to beating big odds. It's a significant day for the governor of the Bank of Canada: he's just laid out his reasons to the entire country and a global audience for keeping the central bank's benchmark interest rate steady for a second straight time. That night is also Game 1 of the NHL's Stanley Cup finals; Macklem ends his press conference with a hearty 'Go Oilers!' It's a rematch from last year's heartbreak, when the Oilers came oh-so-close to mounting a seemingly impossible four-game comeback against the Florida Panthers, only to fall short by a single goal in Game 7. Macklem, too, was almost safe to declare victory last year. He had just about secured a coveted 'soft landing' for Canada's economy — a rare feat that sees restrictive monetary policy bring down surging levels of inflation without tipping the economy into a prolonged downturn. Story continues below advertisement 'We got inflation down. We didn't cause a recession,' Macklem said in an interview with The Canadian Press after the rate announcement Wednesday. 'And, to be frank, until President (Donald) Trump started threatening the economy with new tariffs, we were actually seeing growth pick up.' Fresh out of one crisis, the central bank now must contend with another in U.S. tariffs. 1:28 Doug Ford blames Trump, interest rates for Canada's stagnant housing market Five years into his tenure as head of the Bank of Canada, Macklem said he sees the central bank's role in stickhandling the economy — as well as Canada's role on the world stage — evolving. Many Canadians have become more familiar with the Bank of Canada in recent years. After the COVID-19 pandemic recovery ignited inflation, the central bank's rapid tightening cycle and subsequent rate cuts were top-line news for anxious Canadians stressed about rising prices and borrowing costs. Story continues below advertisement That was all in pursuit of meeting the central bank's inflation target of two per cent, part of a mandate from the federal government that's up for review next year. Get weekly money news Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday. Sign up for weekly money newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Macklem said the past few years have led the Bank of Canada to scrutinize some of its metrics, like core inflation and how it responds to supply shocks in the economy. But he defends keeping the bank's inflation target, particularly at a time of global upheaval. 'Our flexible inflation targeting framework has just been through the biggest test it's ever had in the 30 years since we announced the inflation target,' he said. 'I'm not going to pretend it's been an easy few years for anybody. But I think the framework has performed well.' Macklem said, however, that he sees room to build out the mandate to address other areas of concern from Canadians, such as housing affordability. Whether it's the high cost of rent or a mortgage, or surging prices for groceries and vehicles, Macklem said the past few years have been eye-opening to Canadians who weren't around the last time inflation hit double digits in the 1980s. 'Unfortunately, a whole new generation of Canadians now know what inflation feels like, and they didn't like it one bit,' he said. Story continues below advertisement Monetary policy itself can't make homes more affordable, he noted — in a nutshell, high interest rates make mortgages more expensive while low rates can push up the price of housing itself because they stoke demand. But Macklem said one of the things he's reflecting on is that inflation can get worse when the economy isn't operating at its potential or when it's facing great disruption. 'There is a role for monetary policy to smooth out some of that adjustment — support the economy while ensuring that inflation is well-controlled.' He didn't offer suggestions on how the mandate might expand to address housing affordability specifically, but said 'the work is ongoing' and will be settled in meetings with the federal government next year. Right now, he's trying to make sure that the economic impacts from Canada's tariff dispute with the United States don't result in prolonged inflation. The Bank of Canada is not alone in debating how monetary policy ought to respond in what Macklem called a more 'shock-prone' world. The G7 Finance Ministers' Summit in Kananaskis, Alta., last month also featured roundtables with the bloc's central bankers. Conversations at the summit were 'candid,' Macklem said, and though the nations issued a joint statement at the close of the event, that doesn't mean they agreed on everything. Story continues below advertisement 'International co-operation, to be honest, has never been easy. It is particularly difficult right now, but that doesn't make it less important. That makes it more important,' he said. 'I do think Canada, as the chair of the G7, has a leadership role to play.' 2:56 Carney's government tables 'One Canadian Economy' bill to eliminate internal trade barriers The Bank of Canada is also changing the way it has conversations with Canadians and the kind of data it considers. A day after the June interest rate decision, deputy governor Sharon Kozicki told a Toronto business crowd how the central bank is using data more nimbly, relying heavily on surveys and more granular information to make monetary policy decisions in an uncertain time. These sources offer a faster way to see what's happening on the ground in the economy than traditional statistical models allow. Story continues below advertisement Macklem said the central bank would previously have dismissed most supply shocks as transitory — likely to pass without the need for central bank adjustments, such as rising and falling oil prices. But he said the Bank of Canada needs to be running a more 'nuanced playbook' now to respond to some increasingly common shocks: supply chain disruptions, trade conflicts and extreme weather to name a few. An overheating economy running up against a supply disruption is the kind of inflationary fire Macklem is trying to avoid in this latest crisis. 'The economy does not work well when inflation is high,' he said. 'And the primary role of the Bank of Canada is to ensure that Canadians maintain confidence in price stability. That's all we can do for the Canadian economy. That's what we can do for Canadians. And that's what we're focused on.' Later in the day on Wednesday, the Edmonton Oilers took Game 1 of the Stanley Cup finals. The Canadian team was down but roared back to win 4-3 in overtime. It's still early in the Bank of Canada's response to the latest global shock. But with any luck, Macklem's team might also get a leg up with lessons learned the last time they faced big odds.
Globe and Mail
42 minutes ago
- Globe and Mail
The Nasdaq Bounces Back: 2 Artificial Intelligence (AI) Stocks Worth Buying Right Now
Technology stocks are surging once again, especially artificial intelligence stocks. But don't think it's too late to buy in. The two AI stocks below have a very bright future. Despite their upfront premiums, rapid and sustained growth rates could deliver huge gains for patient shareholders. This is still the No. 1 artificial intelligence stock Every AI investor should own Nvidia (NASDAQ: NVDA). Nvidia's business model and savvy strategy have placed it at the center of the AI revolution, a position it will likely retain for many years to come. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » At the core of Nvidia's business model is its hardware for graphics processing units (GPUs). These GPUs power data centers around the world, which in turn power the training and execution of nearly every AI model. With a 90% market share for data center GPUs, it's safe to say that Nvidia dominates the market for GPUs related to AI applications. The market simply can't get enough of Nvidia's components. Just take a look at Nvidia's gross profits and customer demand. Nvidia currently enjoys industry-leading gross margins of around 70%. GPU makers like Intel (NASDAQ: INTC), meanwhile, have gross profit margins of around 30%. Nvidia's new Blackwell architecture quickly sold out for 12 months following its release. NVDA Revenue Growth Estimate for Current Fiscal Year data by YCharts Nvidia stock isn't cheap with a price-to-sales ratio of 23. However, the AI market is expected to grow by more than 30% per year through 2033. Due to its high profitability, shares trade at just 45 times trailing earnings and just 33 times forward earnings. That's still a premium price. But the upfront premium should be more than justified over a long holding period. There's huge growth potential for this GPU stock Compared to Nvidia, Intel has many flaws. The company made several ill-advised acquisitions over the past decade, and it failed to properly invest in both the hardware and software needs of the AI industry. The result is a stagnating business with relatively low levels of profitability. The trade-off for investors, however, is a rock-bottom valuation. If Intel can figure out how to turn things around in the long term, patient investors could make boatloads of money. Let's break down the current situation in a little more detail. While Nvidia has a roughly 90% market share for data center GPUs, most estimates peg Intel with somewhere around a 1% market share. Ouch. But here's the thing: Intel shares trade at just 1.6 times sales compared to Nvidia's premium valuation of 23 times sales. Intel's discounted valuation is warranted. It's less profitable, is posting significantly lower sales growth figures, and doesn't have a visible pathway to competing head-to-head with Nvidia over the next few years. But if you're willing to look far beyond the next few years, it's reasonable to expect Intel to make up some of the gap between itself and Nvidia. Right now, Nvidia certainly has an edge on GPU performance. But its biggest competitive advantage is arguably its CUDA software platform, which locks developers into its hardware-software ecosystem. Eventually, however, the AI market will grow large enough to accommodate several niches. Intel could compete in segments of the AI industry that Nvidia ignores due to its small size. Intel could also compete aggressively on price, especially since Nvidia's chips are priced at a premium and frequently face supply shortages. All in all, Intel faces a difficult road ahead. But with a rock-bottom valuation and minimal expectations, very patient investors can secure an attractive price for a speculative bet with plenty of risk, but also arguably more upside potential than Nvidia. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor 's total average return is997% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.
