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The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from a seven-week low it hit the previous day, as the stronger Chinese currency boosted global risk appetite.

Risk sentiment stabilized after resilient Chinese trade data and Beijing’s efforts to slow a slide in the value of the yuan currency encouraged investors to buy riskier currencies.

“Clearly the big driver (for the loonie) is the recovery in risk appetite,” said Mark McCormick, North American head of FX strategy at TD Securities.

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At 3:31 p.m. (1931 GMT), the Canadian dollar was trading 0.5% higher at 1.3233 to the greenback, or 75.57 U.S. cents. The currency, which touched near its seven-week low on Wednesday, had been on a losing streak since the beginning of the week.

The rise of the loonie came as the price of oil, one of Canada’s major exports, jumped on Thursday on expectations that falling prices could lead to production cuts, coupled with a steadying of the yuan after a week of turmoil spurred by an escalation in U.S.-China trade tensions.

“Commodities are a little bit higher, oil’s up as well ... and the Canadian dollar is firming on the back of that,” McCormick added.

U.S. crude oil futures settled 2.8% higher at $52.54 a barrel.

Meanwhile, new home prices in Canada fell 0.1% in June, for the second month in a row, domestic data showed. Prices have been flat or falling since August 2018.

Canadian government bond prices were higher across the yield curve, with the two-year price up 0.5 Canadian cent to yield 1.358% and the 10-year rising 7 Canadian cents to yield 1.236%.

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