The Canadian dollar strengthened against its U.S. counterpart on Tuesday as hopes rose that the coronavirus epidemic may be close to peaking, boosting the price of oil, one of Canada’s major exports.
U.S. crude oil futures settled 0.8% higher at $49.94 a barrel as the number of new coronavirus cases slowed in China, easing some concerns about lengthy destruction of oil demand.
Still, oil has fallen more than 20% from its January peak, which could hurt prospects for new investment in Canada’s energy sector. The federal government must rule by the end of February whether Teck Resources Ltd can build a massive oil sands mine in northern Alberta.
At 5 p.m. (2200 GMT), the Canadian dollar was trading 0.2% higher at 1.3287 to the greenback, or 75.26 U.S. cents. The currency, which hit on Monday its weakest intraday level in four months at 1.3330, traded in a range of 1.3276 to 1.3320.
Bank of Canada Governor Stephen Poloz is due to participate in a panel discussion on Thursday in Melbourne, Australia, which could offer clues on the outlook for interest rates.
Last month, the central bank opened the door to an interest rate should a recent slowdown in domestic growth persist. But data since then has showed that the economy added more than twice the number of jobs than expected in January.
Canadian government bond yields rose across the yield curve in sympathy with U.S. Treasuries as Federal Reserve Chair Jerome Powell was fairly upbeat about the outlook for the U.S. economy in the first of his twice-a-year updates to Congress.
The 10-year yield was up 4.3 basis points at 1.363%.
Ontario, one of the world’s largest subsovereign debtors, has launched a 7-year green bond with an issue size of C$500 million, a representative for the province’s finance ministry said, confirming an earlier Reuters report.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.