TORONTO: Higher crude prices helped the Canadian dollar strengthen against a broadly weaker US dollar on Tuesday, but trading stayed within its recent band due to a dearth of economic data to inspire moves, and direction was likely to come from oil and wider market sentiment.
The weaker greenback and the ongoing conflict in Yemen pushed the price of crude, a key Canadian export, higher, despite Saudi Arabia's announcement of record oil output last month.
At 9:12 a.m. EDT (1312 GMT), the Canadian dollar was at C$1.2049 to the greenback, or 82.99 US cents, stronger than the Bank of Canada's official close of C$1.2110, or 82.58 US cents, on Monday.
The currency's strongest level of the session was C$1.2025 and its weakest level was C$1.2107
US crude prices rose 1.5 percent to $60.12, while Brent crude was up 1.6 percent at $65.98.
The Canadian dollar is expected to trade between C$1.2000 and C$1.2100 against the US dollar on Tuesday, according to National Bank Financial.
Canadian government bond prices were mixed across the maturity curve with longer-term bonds priced lower. The two-year price was down 3 Canadian cents at 0.722 percent and the benchmark 10-year down 37 Canadian cents at 1.861.
The Canada-US two-year bond spread was 11.4 basis points, while the 10-year spread was -42.8 basis points.
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