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The Canadian dollar strengthened to a three-year high against its U.S. counterpart on Thursday as U.S. President Joe Biden’s push for additional government spending bolstered investor bets on global economic recovery.

The loonie was trading 0.2 per cent higher at 1.2289 to the greenback, or 81.37 U.S. cents, extending a string of gains since last Friday and the biggest advance among G10 currencies. It touched its strongest level since February 2018 at 1.2280.

Global shares extended recent gains and the price of oil , one of Canada’s major exports, rose 2.2 per cent after Biden proposed a $1.8 trillion stimulus package and the Federal Reserve said it was too early to consider rolling back emergency support for the economy.

The Bank of Canada has been more hawkish than the Fed. Last week, it signaled it could start hiking rates from record lows in late 2022 and cut the pace of its bond purchases.

Canada’s GDP report for February is due on Friday which could help guide expectations for the BoC. While the central bank has raised its forecast for Canadian economic growth this year it sees the COVID-19 pandemic raising uncertainty about the amount of slack in the economy.

Ontario, Canada’s most populous province, will introduce three paid sick days for all workers during the pandemic, the government announced on Wednesday, as hospitals struggle through a third wave of infections largely driven by coronavirus variants passed through workplaces.

Canadian government bond yields were higher across a steeper curve, tracking the move in Treasury yields. The 10-year rose 4 basis points to 1.573 per cent.

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