The number of Americans filing new claims for unemployment benefits jumped to a 1-1/2-year high last week, and producer prices rebounded modestly in April. The data was seen as consistent with most economists' expectations of a recession by the end of the year. Canada sends about 75% of its exports to the United States, including oil. The price of oil fell 2.3% as a political standoff over the U.S. debt ceiling added to recession jitters, while Wall Street was pressured by another rout in the regional banking sector. Meanwhile, the U.S. dollar gained ground against a basket of major currencies, helped by losses for sterling despite another interest rate hike from the Bank of England.
The selloff in sterling "triggered demand for USD that carried across the majors," Sahota said. Canadian government bond yields eased across a flatter curve, tracking moves in U.S. Treasuries. The 10-year bond yields was down 7.8 basis points to 2.828%. (Reporting by Fergal Smith; Editing by Leslie Adler)
