The Canadian dollar edged higher against its U.S. counterpart on Wednesday, as investors bet that global economic recovery would be sustained despite the fast-spreading Omicron coronavirus variant and a domestic estimate showed factory sales rising in November.
Global equity markets and the price of oil, one of Canada’s major exports, added to the previous day’s rally even as a growing number of countries announced restrictions to reduce the spread of the new variant.
U.S. crude prices rose 0.4 per cent to $71.41 a barrel, while the Canadian dollar was trading 0.2 per cent higher at 1.2880 to the greenback, or 77.64 U.S. cents.
The currency traded in a range of 1.2877 to 1.2924, after touching on Monday its weakest level since December 2020 at 1.2963.
Canadian factory sales rose 3.1 per cent in November, driven mostly by higher sales in the primary metal, transportation equipment, and petroleum and coal products industries, Statistics Canada said in a preliminary estimate.
Canada’s GDP report for October, due on Thursday, could offer further clues on the strength of the domestic economy.
Canadian government bond yields were mixed across a steeper curve. The 10-year rate touched its highest level since Dec. 13 at 1.465 per cent before dipping to 1.455 per cent, up one and a half basis points on the day.
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