Canadian dollar rises to 2-week high as stock markets rally

TORONTO (Reuters) – The Canadian dollar strengthened to a two-week high against its U.S. counterpart on Monday, tracking improvement in risk appetite ahead of domestic data later in the week that could help guide expectations about the strength of economic recovery.

Global shares <.WORLD> and the price of oil, one of Canada’s major exports, rose as suggestions U.S. President Donald Trump’s health was improving brought relief to markets and after U.S. House Speaker Nancy Pelosi said progress was being made on additional fiscal stimulus.

U.S. crude oil futures <CLc1> climbed 4.7% to $38.78 a barrel, while the Canadian dollar <CAD=> was trading 0.3% higher at 1.3268 to the greenback, or 75.37 U.S. cents. The currency touched its strongest intraday level since Sept. 21 at 1.3263.

Canada’s trade report for August is due on Tuesday, while Bank of Canada Governor Tiff Macklem is scheduled to speak on Thursday and the September employment report is due on Friday.

The Canadian dollar is set to gain ground against its U.S. counterpart as an expected recovery in the global economy from the coronavirus crisis improves the outlook for commodity prices, a Reuters poll showed.

Still, speculators have raised their bearish bets on the Canadian dollar to the highest in four weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Sept. 29, net short positions had increased to 18,948 contracts from 18,882 in the prior week.

Canadian government bond yields were higher across a steeper curve in sympathy with U.S. Treasuries on Monday. The 10-year <CA10YT=RR> rose 1.6 basis points to 0.584%, while the gap between it and its U.S. equivalent widened by 1.7 basis points to a spread of 14.3 basis points in favor of the U.S. note.

That was the widest spread since June 25.

(Reporting by Fergal Smith; Editing by Steve Orlofsky)

Source Article

Exit mobile version