TORONTO: The Canadian dollar strengthened to a nearly one-week high against its US counterpart on Thursday, buoyed by a deal by major oil producers to limit output.
Gains for the loonie followed a 0.7 percent advance on Wednesday, its biggest in nearly four weeks, after the Organization of the Petroleum Exporting Countries agreed to limit crude output at its policy meeting in November.
Oil prices stabilized as investors questioned whether the agreement to curb production would be enough to rebalance a heavily oversupplied market. US crude prices were up 0.32 percent at $47.20 a barrel.
At 9:16 a.m. EDT (1316 GMT), the Canadian dollar was trading at C$1.3082 to the greenback, or 76.44 US cents, stronger than Wednesday's close of C$1.3109, or 76.28 US cents.
The currency's weakest level of the session was C$1.3116, while it touched its strongest since Friday at C$1.3048.
On Tuesday, the loonie hit its weakest in nearly six months at C$1.3281, pressured by recent disappointing domestic economic data and a more dovish tone from the Bank of Canada.
Canadian government bond prices were mixed across the yield curve, with the two-year down 0.5 Canadian cent to yield 0.516 percent and the benchmark 10-year rising 6 Canadian cents to yield 0.975 percent.
The 10-year yield fell 3.3 basis points further below its US counterpart as the rate of growth for the US economy was revised higher for the second quarter. That left the spread at -61.9 basis points, its widest since March 29.
Domestic gross domestic product data for July is due on Friday. The economy is expected to have grown by 0.3 percent, which would reinforce expectations that it rebounded in the third quarter after contracting in the second.
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