On Friday, the Canadian dollar was little changed against the US dollar, as it was trading close to a low of five months.
This was after investors were spooked by the closure of the Silicon Valley Bank, which offset the stronger-than-expected US jobs data for February.
The Canadian dollar
The loonie had reached its weakest value in the day since October 17th at 1.3861 earlier but was later trading unchanged against the greenback at $1.3830, or 72.31 US cents.
The currency has lost 1.7% for the week, which is the biggest decline it has recorded in the week since September.
Market analysts said the Canadian dollar had not gotten a break this week. Earlier in the session, the yield narrowing had helped the loonie.
However, the SVB failure resulted in a fallout on equities, and this pushed down high-beta forex currencies. These tend to have more volatility than the overall market.
The concerns
There was also a decline in Wall Street indexes, as investors were concerned about the health of US banks after a high-profile lender like SVB had to be closed by regulators.
There was also a decline in the US dollar against a basket of its peers after the February US jobs data report indicated a reduction in inflation pressures.
The Canadian economy
21,800 jobs were added in February to the Canadian economy, beating expectations. It added pressure on the Bank of Canada to deliver another rate hike.
This was after the Canadian central bank had asserted that it wanted to end its year-long hiking campaign.
The Bank of Canada had a meeting on Wednesday in which it opted to leave its benchmark interest rate unchanged at the peak of 4.50%.
There was also a decline in Canadian government bond yields, as they were tracking the movement of the US counterparts with investors looking for safe havens.
The 10-year bond yield dropped to 2.999%, the lowest since February 9th, while there was a 1.3% rise in the price of oil to $76.68 per barrel.
