Canadian dollar holds near five-month high ahead of G20 summit

TORONTO: The Canadian dollar strengthened slightly against its US counterpart on Thursday, approaching a near five-month high posted the day before, as investors weighed the prospect of progress in a trade dispute between the United States and China.

Global stocks rose following a report that the US and China have agreed to a tentative truce in their trade dispute before a G20 summit this weekend.

Canada is a major exporter of commodities, including oil, so its economy could benefit from reduced uncertainty for global trade.

US crude oil prices were little changed at $59.37 a barrel, constrained by perceptions that supply is ample despite prospects for continued OPEC curbs.

At 9:37 a.m. (1337 GMT), the Canadian dollar was trading 0.1% higher at 1.3113 to the greenback, or 76.26 US cents. The currency, which on Wednesday touched its strongest since Feb. 5 at 1.3108, traded in a narrow range of 1.3111 to 1.3138.

The loonie is on track to gain 3.1% in June, while it has gained more than 4% since the start of the year, the best performance among G10 currencies.

The modest gain on Thursday for the loonie came as data from Statistics Canada showed that average weekly earnings of non-farm payroll employees rose by 2.9% in April, the fastest pace since August last year, and that non-farm payroll employees rose by 17,000 for the same month from March.

Canadian gross domestic product data for April is due on Friday and could help guide expectations for interest rate decisions by the Bank of Canada over the coming months.

Canadian government bond prices were higher across the yield curve in sympathy with US Treasuries. The two-year rose 3.5 Canadian cents to yield 1.444% and the 10-year was up 21 Canadian cents to yield 1.480%.

Earlier in the session, the 10-year yield touched its highest since June 12 at 1.522%.