The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Thursday as oil prices rose and the greenback broadly declined.
Gains for the loonie came ahead of the release on Friday of Canada’s employment report for December, which could help guide expectations for next week’s interest rate decision from the Bank of Canada.
At 9:08 a.m., the Canadian dollar was trading 0.4 per cent higher at 1.3530 to the greenback, or 73.91 U.S. cents. The currency, which fell 7.8 per cent in 2018, touched its strongest since Dec. 21 at 1.3528.
The price of oil, one of Canada’s major exports, rose despite volatile currency and stock markets, as well as concerns that an economic slowdown in 2019 will curb fuel demand. U.S. crude prices were up 1.8 per cent at $47.38 a barrel.
Stocks tumbled after Apple Inc stunned investors with a rare sales warning that inflamed fears that the Sino-U.S. trade war and a slowing China economy would erode corporate profits more than expected.
The U.S. dollar declined against a basket of major currencies as the yen surged. Investors were attracted to the perceived safety of the Japanese currency.
Canadian government bond prices were lower across a steeper yield curve, with the two-year down 2 cents to yield 1.853 per cent and the 10-year falling 12 cents to yield 1.916 per cent.
The gap between Canada’s 10-year yield and its U.S. equivalent narrowed by 3.6 basis points to a spread of 72.4 basis points in favour of the U.S. bond, its narrowest since Nov. 28.