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The commodity-linked Canadian dollar on Wednesday strengthened to its highest in nearly a week against its U.S. counterpart, benefiting from investor optimism that rising COVID-19 cases in some parts of the world would not derail economic recovery.

Wall Street and the price of oil, one of Canada’s major exports, rose for a second day as investors bet that an earlier flight to safety sparked by fears about the spread of the Delta coronavirus variant was overdone.

U.S. crude futures settled 4.6% higher at $70.30 a barrel, while the safe-haven U.S. dollar lost ground against a basket of major currencies.

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“Risk sentiment has dramatically reversed and is now looking pretty upbeat and that’s really denting demand for the (U.S.) dollar,” said Edward Moya, a senior market analyst at OANDA in New York. “In this environment, commodity currencies are going to shine.”

The Canadian dollar was trading 0.9% higher at 1.2566 to the greenback, or 79.58 U.S. cents, after touching its strongest level since last Thursday at 1.2521. On Monday, it hit a five-month low at 1.2807.

Canada’s national statistics agency revealed new weights for the basket of goods and services in the Consumer Price Index (CPI), with shifts including a higher weighting for the shelter component as housing prices soar.

Canadian new home prices rose 0.6% in June from May, the smallest increase in six months, data from Statistics Canada showed. The annual increase was 11.9%.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries. The 10-year rose 4.3 basis points to 1.222%, after touching on Monday its lowest intraday level in five months at 1.097%.

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