The Canadian dollar was little changed against its U.S. counterpart on Wednesday, with the currency staying within reach of an earlier two-week high as oil prices rose and investors rebalanced their portfolios.
The loonie was trading at 1.2990 to the greenback, or 76.98 U.S. cents, having touched its strongest intraday level since Nov. 10 at 1.2982. It has climbed 2.5% since the start of the month.
The price of oil, one of Canada’s major exports, rose to the highest level in more than eight months, as data showing a surprise drop in weekly U.S. crude inventories extended a rally driven by hopes that a COVID-19 vaccine will boost fuel demand.
U.S. crude oil futures settled 1.8% higher at $45.71 a barrel.
The Canadian dollar was supported by the “continued rally for oil prices,” said Erik Bregar, director and head of FX strategy at the Exchange Bank of Canada, adding: “We had what appeared to me another wave of month-end (U.S.) dollar selling due to portfolio managers rebalancing.”
The greenback fell against a basket of major currencies, while global shares were on course for their best month ever, with investors cheering the prospect of a smooth handover of power after the U.S. presidential election and confident that vaccines would soon be ready.
U.S. markets will be closed for the Thanksgiving holiday on Thursday.
Canada’s main share index is set to extend its rally over the coming year as the likely rollout of a vaccine bolsters prospects for the economically sensitive stocks that dominate the index, a Reuters poll found.
Canadian service workers are faring even worse during the pandemic than previously thought, with hundreds of thousands of those who still have jobs not actually putting in any hours.
Canada’s 10-year yield eased nearly 1 basis point at 0.709%.
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