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The Canadian dollar strengthened against its U.S. counterpart on Monday as investors cheered the Federal Reserve’s patience on reducing its asset purchases and data showed a widening of Canada’s current account surplus in the second quarter.

World stocks hovered around record highs, underpinned by Friday’s Jackson Hole speech by Federal Reserve Chair Jerome Powell in which he said only that tapering of stimulus measures could begin this year. Some investors had thought tapering could begin as soon as October.

Canada’s current account surplus widened to C$3.6-billion in the second quarter from a revised C$1.8-billion surplus in the first quarter, on positive trade in goods and services, along with a higher investment income surplus.

A surplus in a country’s current account tends to raise demand for its currency in the foreign exchange market.

The Canadian dollar was trading 0.3 per cent higher at 1.2584 to the greenback, or 79.47 U.S. cents, after touching its strongest intraday level since Aug. 17 at 1.2573.

Speculators have raised their bullish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed. As of Aug. 24, net long positions had increased to 5,877 contracts from 2,660 in the prior week.

The price of oil, one of Canada’s major exports, pulled back from an earlier three-week high as Hurricane Ida weakened after forcing shutdowns of U.S. Gulf oil production, and OPEC+ looked set to go ahead with a planned oil output increase. U.S. crude prices were down 0.6 per cent at $68.32 a barrel.

Canadian government bond yields were little changed across the curve, with the 10-year trading at about 1.21 per cent.

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