The Canadian dollar on Monday strengthened to its highest level in nearly four weeks against its U.S. counterpart as the price of oil, one of Canada’s major exports, rose and the greenback gave back some recent gains against major rivals.
Oil advanced as sources said that OPEC and its allies have agreed to stick to their existing output agreement despite pressure from consumers to cool a red hot market.
U.S. crude prices were up 3 per cent at $78.19 a barrel, while the U.S. dollar declined against a basket of currencies. Losses for the greenback came after four consecutive weeks of increases.
The Canadian dollar was last trading 0.7 per cent higher at 1.2565 to the greenback, or 79.59 U.S. cents, after touching its strongest level since Sept. 7 at 1.2561.
Speculators have cut their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Sept. 28, net short positions had fallen to 20,235 contracts from 27,877 in the prior week.
Domestic data showed that the value of building permits decreased 2.1 per cent in August from July. Still, permits were up 16.9 per cent from August last year.
Canadian trade data for August is due on Tuesday and the September employment report is due on Friday, which could offer clues on the Bank of Canada’s policy outlook.
Canadian government bond yields were higher across a steeper curve, with the 10-year up 4.2 basis points at 1.513 per cent. On Friday, Canada’s 10-year yield moved above its U.S. equivalent for the first time since April last year.
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