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The Canadian dollar CADUSD rose against its U.S. counterpart on Monday as oil prices held on to recent gains and domestic data provided more evidence that Canada’s economy strengthened in the final quarter of last year.

Canadian factory sales rose 2.6 per cent in November from October driven mostly by higher sales of primary metals, petroleum and coal products, non-metallic minerals, and food product, Statistics Canada said.

“Combined with other economic indicators, this release corroborates the view that the Canadian economy enjoyed a solid fourth quarter,” Omar Abdelrahman, an economist at TD Economics, said in a note.

Separate data showed that Canadian home sales were up 0.2 per cent in December from November even as supply fell to a record low level.

The Bank of Canada will release its quarterly Business Outlook Survey and Canadian Survey of Consumer Expectations at 10:30 a.m. ET (1530 GMT). Despite the fast-spreading Omicron variant, some investors expect the central bank to begin hiking interest rates this month.

The price of oil, one of Canada’s major exports, was steady as investors bet that global supply will remain tight despite a rise in Libyan output.

U.S. crude prices were unchanged at $83.82 a barrel, while the Canadian dollar strengthened 0.3 per cent to 1.2517 per greenback, or 79.89 U.S. cents, adding to last week’s gains. It traded on Monday in a range of 1.2501 to 1.2557.

Speculators have cut their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Jan. 11, net short positions had decreased to 7,376 contracts from 11,025 in the prior week.

Canadian government bond yields were higher across the curve. The 10-year rose 3.1 basis points to 1.804 per cent, its highest level since Nov. 24.

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