C$ ends firmer, helped by higher oil prices

TORONTO: The Canadian dollar strengthened against the US currency on Wednesday, helped by higher oil prices and an early dip in the greenback following weaker-than-expected US first-quarter growth data.

Oil edged higher on Wednesday, shaking off earlier losses following a large build up in US gasoline inventories, buoyed by gains in the stock market and heavy spread trading.

Canada is a major oil exporter and typically benefits from firmer energy prices.

"We're seeing oil prices trading a little bit higher here, that's perhaps given the Canadian dollar a little bit of support," said Shaun Osborne, chief currency strategist at TD Securities.

The Canadian dollar ended the session trading at C$1.0479 against the greenback, or 95.43 US cents. This was stronger than Tuesday's North American finish at C$1.0509, or 95.16 US cents.

The Canadian dollar started the North American session stronger, as the greenback initially slipped against some major currencies following the unexpectedly weak revision to US data.

First-quarter US gross domestic product expanded at a 1.8 percent annual rate in the United States. Economists polled by Reuters had expected growth to remain unrevised at 2.4 percent.

"It's really being buffeted around by big dollar moves again in the absence of any really significant local moves," said Adam Cole, global head of currency strategy at RBC Capital Markets.

"Markets are just so dominated by the US dollar view at the moment. Nothing much else is really getting a look in."

But the impact of the GDP data was fleeting. TD's Osborne said the revision to US data should not derail a broader appreciation in the greenback, which has gained nearly 3 percent against the loonie in the past week.

Reassuring comments by European Central Bank chief Mario Draghi also helped overall sentiment, as he said monetary policy will remain accommodative.

Canadian government debt prices stronger. The two-year bond rose 7 Canadian cents to yield 1.228 percent. The benchmark 10-year bond rose 31 Canadian cents to yield 2.502 percent.