The Canadian dollar strengthened to its highest in more than three weeks against its U.S. counterpart on Thursday as the greenback broadly fell and investors awaited clues on the prospect of a deal to revamp the NAFTA trade pact.
At 9:22 a.m. (1322 GMT), the Canadian dollar was trading 0.2 per cent higher at $1.2894 to the greenback, or 77.56 U.S. cents. The currency touched its strongest since Aug. 28 at $1.2890.
Canadian Prime Minister Justin Trudeau said on Wednesday he wanted to see flexibility from the United States if the two sides are to reach a deal on renewing the North American Free Trade Agreement, which Washington insists must be finished by the end of the month.
The U.S. dollar fell to a nine-week low against a basket of major currencies as investors shifted their focus from a trade row between China and the United States to the Federal Reserve’s monetary tightening plans.
A bounce in world stocks on relief that fresh U.S. and Chinese tariffs on reciprocal imports were less harsh than feared continued, although investors remained wary about the next steps in the US-Sino trade war.
Canada runs a current account deficit and exports many commodities, so its economy could be hurt if the global flow of trade or capital slows.
The price of oil, one of Canada’s major exports, added to recent gains even after U.S. President Donald Trump called on OPEC to “get prices down now!” ahead of a meeting of major oil exporters in Algeria this weekend.
U.S. crude prices were up 0.6 per cent at $71.54 a barrel.
Canada added 13,600 jobs in August, driven by hiring in the finance, construction and manufacturing industries, according to a report from ADP.
Canada’s inflation report for August and July retail sales data are due on Friday.
Canadian government bond prices were lower across a steeper yield curve, with the 10-year falling 12 Canadian cents to yield 2.436 per cent. The 10-year yield touched its highest intraday since May 24 at 2.443 per cent.