The Canadian dollar strengthened against its U.S. counterpart on Monday as investors grew more hopeful of a coronavirus vaccine, but gains for the currency were restrained as oil prices fell and ahead of a busy week of domestic economic data.
World stocks rose after drugmaker AstraZeneca said it has resumed British clinical trials of its COVID-19 vaccine, one of the most advanced in development.
As the mood in global equity markets lifted, the safe-haven U.S. dollar fell against its major peers. Investors eyed a Federal Reserve interest rate decision on Wednesday.
The price of oil, one of Canada’s major exports, slipped amid concerns about a stalled global economic recovery and worries over renewed Libyan supply. U.S. crude prices were down nearly 1 per cent at $36.96 a barrel.
The Canadian dollar was trading 0.1 per cent higher at 1.3161 to the greenback, or 75.98 U.S. cents. The currency, which fell last week for the first time in six weeks, traded in a range of 1.3154 to 1.3196.
Speculators have cut their bearish bets on the Canadian dollar to the lowest in six weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Sept. 8, net short positions had fallen to 17,355 contracts from 27,006 in the prior week.
Canada’s inflation report for August is due on Wednesday, while the July retail sales report is set for Friday. The data could help guide expectations for economic recovery.
Last week, the Bank of Canada said that the third-quarter rebound was looking to be faster than anticipated but the economy will continue to require extraordinary support as it moves to a recuperation phase.
Canadian government bond yields were slightly lower across the curve on Monday, with the 10-year down about half a basis point at 0.543 per cent.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.