As the Canadian dollar was near its lows, long-term investors were loading up on Canadian assets.
StatsCan reports that foreigners bought $21.4 billion of Canadian securities while Canadian investors added $2.0 billion of foreign securities to their holdings. It was the largest inflow in 2 years.
Foreign investment was focused on longer-term debt instruments during the month. This activity occurred against the backdrop of large increases in the net supply of bonds by the federal and provincial governments. Canadian long-term interest rates were down by 18 basis points during the month.
USD/CAD traded between 1.08 and 1.10 in May.
USD/CAD is down a few pips to 1.0738 immediately after the release but this report is rarely a market mover so US data is likely to be driving the move.
