Canadian dollar notches two-week high as Wall Street rallies

The Canadian dollar CADUSD was little changed against its U.S. counterpart on Thursday, with the currency giving back its earlier gains as oil prices fell and a rally on Wall Street lost momentum.

The loonie was trading nearly unchanged at 1.3730 to the greenback, or 72.83 U.S. cents, after touching its strongest level since March 7 at 1.3631.

The price of oil, one of Canada’s major exports, fell after U.S. Energy Secretary Jennifer Granholm told lawmakers that refilling the country’s Strategic Petroleum Reserve (SPR) would be difficult this year and may take several years.

U.S. crude oil futures settled 1.3% lower at $69.96 a barrel, while the S&P 500 index was also down.

The index had initially rallied on hopes that the Federal Reserve is nearing a pause in it interest rate hiking cycle. But recent banking sector turmoil has clouded the economic outlook, weighing on sentiment.

Canadian retail sales data for January, due to be released on Friday, will offer clues on the strength of the domestic economy. Analysts forecast sales to rise by 0.7% from December.

Canadian government bond yields were mixed across a steeper curve. The 2-year eased 6.8 basis points to 3.453%, while the 10-year was up 2.2 basis points at 2.752%.