The Canadian Dollar Notched Its Biggest Percentage Gain

Treasuries rallied in reaction, with yields on two-year notes US2YT=RR falling to three-week lows, as did bonds in Europe and Asia.

The odd man out was Canada, where yields hit their highest since late 2013 after the Bank of Canada raised rates a quarter point saying the economy no longer needed as much stimulus. 

The Canadian dollar CAD=D4 notched its biggest percentage gain since March 2016 and was last trading near one-year peaks at C$1.2740. 

The main loser was the U.S. dollar which slipped to 112.97 on the yen JPY=, while the euro edged up to $1.1437 EUR=. Against a basket of currencies, the dollar was pinned just above nine-month lows at 95.602 .DXY. 

The drop in U.S. yields benefited gold, which pays no interest, and nudged the precious metal up 0.3 percent to $1,223.67 XAU= and away from its recent trough of $1,204.45. 

Oil prices flatlined as producer club OPEC said it expected demand for its crude to decline next year as rivals pump more, pointing to a market surplus in 2018 despite efforts to tighten supply.

Brent crude futures LCOc1 were up 1 cent at $47.75 a barrel, while U.S. crude CLc1 was unchanged at $45.49.