Canadian dollar recovers from near two-week low as oil climbs

Canadian dollar recovers from near two-week low as oil climbs

The Canadian dollar edged higher against its U.S. counterpart on Tuesday along with rising oil prices, with the currency clawing back some ground after hitting its weakest in nearly two weeks the day before.

The loonie was trading 0.2 per cent higher at 1.2763 to the greenback, or 78.35 U.S. cents, having traded in a range of 1.2732 to 1.2791.

It hit its weakest since Dec. 29 at 1.2835 on Monday, when investors worried that attempts to impeach U.S. President Donald Trump could delay the Joe Biden administration’s first moves on stimulus.

Canada sends about 75 per cent of its exports to the United States, including oil. U.S. crude oil futures were up 1 per cent at $52.77 a barrel, as tighter supply and expectations of a drop in U.S. inventories offset concerns over rising coronavirus cases globally.

On Monday, a Bank of Canada survey showed that business sentiment in the country has turned slightly positive for the first time since the COVID-19 pandemic began. The central bank is due to make an interest rate decision next week.

Canadian government bond yields were higher across much of the curve on Tuesday. The 10-year rose 1.6 basis points to 0.859 per cent, having touched its highest intraday since March 27 at 0.876 per cent.

Ontario, Canada’s most populous province, is widely expected to announce further pandemic restrictions later today after health authorities release new case modeling.

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Published at Tue, 12 Jan 2021 14:46:44 +0000