The Canadian dollar gained against the greenback on Thursday, recovering from a near five-month low a day earlier, as trade-related pressure eased on financial markets and ahead of a speech by a senior Bank of Canada official.
At 9:14 a.m., the Canadian dollar was trading 0.2 per cent higher at 1.3490 to the greenback, or 74.13 U.S. cents. The currency, which hit on Wednesday its weakest since Jan. 3 at 1.3547, traded in a range of 1.3487 to 1.3521.
Global stocks steadied after hitting the lowest levels in more than two months on Wednesday, when investors worried that a drawn-out trade dispute between the United States and China could weigh on global growth.
Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt by a slowdown in the global flow of trade or capital.
Canada’s current account deficit widened to $17.35 billion in the first quarter from a revised $16.62 billion deficit in the fourth quarter, on a higher deficit on trade goods and services, Statistics Canada said.
The price of oil was supported by a tightening crude market and rising political tensions in the Middle East. U.S. crude oil futures were up 0.5 per cent at $59.08 a barrel.
Bank of Canada Senior Deputy Governor Carolyn Wilkins is due to speak about the economy. The central bank will release her prepared remarks at 2:15 p.m.
On Wednesday, the Bank of Canada said there was increasing evidence that the economic slowdown was temporary as it left its benchmark interest rate unchanged at 1.75 per cent.
U.S. Vice President Mike Pence and Canadian Prime Minister Justin Trudeau will discuss their countries’ joint dispute with China over Huawei during a meeting in Ottawa on Thursday, a senior U.S. administration official said.
Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 1 cent to yield 1.536 per cent and the 10-year rising 8 cents to yield 1.571 per cent.
The 10-year yield hit on Wednesday its lowest since March 28 at 1.524 per cent.