The Canadian dollar strengthened to a three-week high against its U.S. counterpart on Monday as the greenback broadly declined and ahead of a fiscal update from Canada’s federal government that is likely to unveil new spending plans.
The loonie was trading 0.3% higher at 1.2953 to the greenback, or 77.20 U.S. cents, having touched its strongest intraday level Nov. 9 at 1.2948. For the month, the loonie was on track to gain 2.8%.
Joe Biden’s U.S. election win, hopes for further stimulus and a series of positive COVID-19 vaccine announcements has seen global market sentiment rally in November, prompting commodity-linked currencies, such as the Canadian dollar, to strengthen and the safe-haven U.S. dollar to fall.
The greenback hit on Monday its lowest in two and a half years as a survey showing stronger-than-expected factory activity in China bolstered investor sentiment.
The price of oil , one of Canada’s major exports, fell on uncertainty about whether OPEC+ would agree to extend large output cuts at talks this week, but vaccine hopes still kept benchmark crude on track to rise more than a fifth in November.
In addition to new spending plans, Ottawa is expected to detail the cost of its emergency support measures as a harsh second wave of COVID-19 infections forces renewed health restrictions across the country.
Canada’s main share index , which is dominated by economically sensitive financial and resource stocks, has climbed 11.7% since the start of November. That would be its biggest monthly advance since December 1999.
Canada’s current account deficit widened to $7.5 billion in the third quarter from C$7.0 billion in the second quarter as the trade deficit expanded, Statistics Canada said on Monday.
Canadian government bond yields were mixed across a flatter curve, with the 10-year yield easing half a basis point to 0.686%.
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