The Canadian dollar climbed to a near two-week high against a broadly weaker greenback on Tuesday amid investor optimism that the outcome of the U.S. election would clear the way for U.S. economic stimulus.
The U.S. dollar fell and global shares rose on bets that Democrat challenger Joe Biden will win Tuesday’s U.S. presidential election and launch a large new stimulus package.
A large package would bolster prospects for the Canadian dollar, FX strategists said in a Reuters poll. Strategists expect the loonie to extend its rally over the coming year if the COVID-19 crisis becomes less of a drag on the global economy.
The price of oil, one of Canada’s major exports, rose but concerns over surging coronavirus cases around the world capped further gains.
U.S. crude prices rose 3.5% to $38.09 a barrel, while the Canadian dollar was trading 0.8% higher at 1.3106 to the greenback, or 76.30 U.S. cents.
The currency was on track for its biggest gain since June 1, while it touched its strongest intraday level since Oct. 21 at 1.3102.
Canadian government bond yields were higher across a steeper curve in sympathy with U.S. Treasuries. The 10-year rose 4 basis points to 0.679%, having touched its highest intraday since Aug. 28 at 0.685%.
Canada’s trade report for September is due on Wednesday, while the October jobs report is due on Friday.
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