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The Canadian dollar climbed to a near three-month high against its U.S. counterpart on Monday as investors became more optimistic on global trade and millions of Canadians cast their ballots in the country’s 43rd general election.

The benchmark S&P 500 stock index rose within striking distance of a record high as further signs of progress toward a resolution of the trade dispute between the United States and China helped boost shares in trade-exposed and economically sensitive sectors.

“If the two trade situations, with Brexit and with the U.S. and China, do get to an end point where they are positive for global trade, that’s automatically beneficial for the Canadian dollar and the Canadian economy,” said Michael Goshko, corporate risk manager at Western Union Business Solutions.

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Canada is a major exporter of commodities, including oil, so its economy could benefit from reduced trade uncertainty.

U.S. crude oil futures settled 0.9 per cent lower at $53.31 a barrel.

The expectation that the Federal Reserve will later this month lower its benchmark interest rate below the level of the Bank of Canada’s policy rate has added to support for the loonie, Goshko said.

On Oct. 30, investors expect the Fed to cut its overnight lending rate by a quarter of a percentage point to a range of 1.50 per cent to 1.75 per cent. The same day, the Bank of Canada is seen leaving its target for the overnight rate at 1.75 per cent.

At 3:49 p.m. (1949 GMT), the Canadian dollar was trading 0.3 per cent higher at 1.3082 to the greenback, or 76.44 U.S. cents, its strongest level since July 22.

The gain for the loonie came as Canadians voted to determine whether Prime Minister Justin Trudeau will remain in power after two major scandals.

Trudeau’s Liberals and the main opposition Conservatives are in a neck-and-neck race, according to opinion polls.

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“After some noise around the vote, we think FX players will refocus attention on the Bank of Canada policy outlook, the Fed and international backdrop pretty quickly,” Shaun Osborne, chief market strategist, at Scotiabank said in a note.

The Bank of Canada will release on Tuesday the autumn issue of the Business Outlook Survey, which could help guide expectations for its policy outlook.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries, with the 10-year falling 15 Canadian cents to yield 1.561 per cent.

Last Thursday, the 10-year yield reached a three-month high at 1.608 per cent.

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