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The Canadian dollar CADUSD strengthened against its U.S. counterpart on Thursday as the price of oil rebounded and ahead of a speech by a senior Bank of Canada official that could offer clues on the likelihood of additional interest rate hikes.

Oil, one of Canada’s major exports, rose after four sessions of decline, boosted by hopes that easing anti-COVID-19 measures in China will revive demand and by signs that some tankers carrying Russian oil have been delayed after a G7 price cap came into effect.

U.S. crude prices were up 2.2 per cent at $73.60 a barrel, while the Canadian dollar gained 0.6 per cent to 1.3565 per greenback, or 73.72 U.S. cents.

It traded in a range of 1.3562 to 1.3688, after touching on Wednesday its weakest intraday level in more than one month at 1.3699.

Sharon Kozicki, a deputy governor at the Bank of Canada, is due to give an economic progress after the central bank on Wednesday hiked its benchmark overnight interest rate by half a percentage point and signaled its unprecedented tightening campaign was near an end.

The bank will publish Kozicki’s prepared remarks at 12:30 p.m. ET (1730 GMT).

“While the statement said policy makers ‘will be considering’ whether more hikes are needed to return inflation back to target, the door is clearly being left open to a little more tightening at least early next year,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

Money markets are pricing in a peak level for rates of 4.41 per cent in June, 16 basis points above the current setting.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries.

The 10-year rose 7 basis points to 2.830 per cent, after touching on Wednesday its lowest intraday level in nearly four months at 2.715 per cent.

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