Canadian Dollar Falls to 14-Month Low as Tech Selloff Boosts Safe-Haven Dollar Demand
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The Canadian dollar slid to 1.4214 per USD on Tuesday — a 14-month low — as a tech-led equity selloff drove haven flows into the greenback while falling oil prices stripped away another pillar of support.
How far did the loonie fall, and why?
The Canadian dollar traded at 1.4214 per USD (about 70.35 US cents), touching 1.4217 intraday — its weakest since April 2025, down roughly 0.4% on the day.
Klarity FX director Amo Sahota called it "another blow to an already battered currency," with traders seeking shelter as tech and chip stocks struggled to hold lofty valuations.
This means → the loonie did not crack suddenly; Tuesday was one more leg down in a weeks-long slide, not a fresh shock.
What does a tech selloff have to do with the Canadian dollar?
The Nasdaq and S&P 500 both fell to one-week-plus lows, led by semiconductor stocks — markets are re-examining AI-related debt financing while hawkish Fed expectations firm up.
In plain terms = when tech sells off, traders pile into dollars for safety; a stronger dollar mechanically pushes the loonie down.
The dollar index rose broadly against a basket of major currencies — the loonie just happened to be the hardest hit of the group.
How does falling oil make it worse?
Crude dropped 0.7% to $73.71 a barrel; markets are watching Strait of Hormuz flows, and signs of US-Iran diplomatic progress have eased supply fears.
This means → Canada is a major oil exporter, so cheaper crude = one fewer prop under the loonie.
Add Sahota's list of headwinds — a widening US-Canada rate gap, slowing growth, trade uncertainty — and falling oil removed the last buffer.
What did the central bank governor say — did it help?
Bank of Canada Governor Tiff Macklem said the latest inflation uptick was concentrated in energy, but acknowledged food inflation remains a concern.
Monday's data showed Canada's May annualized CPI at 3.2%, above expectations — yet the BoC's preferred core inflation gauges remained relatively tame.
Sahota's verdict: Macklem's remarks "provided almost no support to the loonie but did, to some extent, ease fears that inflation is running away."
What to watch next?
Canada's 10-year bond yield fell 2.7 basis points to 3.442%, with yields dropping across the curve.
This reflects a market that is pessimistic on Canada's outlook — money is hedging both ways, buying USD for safety and positioning for BoC easing.
Whether the loonie stabilizes depends on the Fed's policy path and global risk appetite improving in tandem — for now, both point the wrong way.
Content is for reference only, not financial advice.