TORONTO: The Canadian dollar strengthened to a five-day high against its US counterpart on Wednesday as attention shifted to restarting production in Alberta's oil sands, although some gains for the currency were pared as oil turned lower.
Production in much of the oil sands region should ramp up soon, top provincial and industry officials said on Tuesday as a wildfire threat eased.
Roughly 1 million barrels per day of output has been lost to the fire, about half of the oil sands' usual daily production.
The loss of production has weighed on Canada's economic outlook. Economists say second-quarter growth may slow to a standstill, leaving the central bank on hold.
Gains for the loonie came as Canada's InnVest Real Estate Investment said that it has entered into an agreement to be bought by Bluesky Hotels and Resorts in a transaction that values InnVest at $2.1 billion, including debt.
Oil prices turned lower after rising earlier as worries about supply disruptions resurfaced. US crude prices were down 0.56 percent to $44.41 a barrel.
At 9:39 a.m. EDT (1339 GMT), the Canadian dollar was trading at C$1.2883 to the greenback, or 77.62 US cents, stronger than Tuesday's close of C$1.2916, or 77.42 US cents.
The currency's weakest level was C$1.2942, while it touched its strongest since May 6 of C$1.2868.
It hit on Monday its weakest in one month of C$1.3016.
Bank of Canada Senior Deputy Governor Carolyn Wilkins said the focus is on downside risks to the economy, because there seems to be so many of them. Wilkins was participating in a panel discussion on "The Changing Global Bond Market and Implications for Investors."
Canadian government bond prices were slightly higher across the maturity curve, with the two-year price up 0.5 Canadian cent to yield 0.526 percent and the benchmark 10-year rising 7 Canadian cents to yield 1.308 percent.
The Canada-US 10-year spread was 0.6 of a basis point more negative at -45 basis points, its biggest gap since April 19, as Canadian government bonds outperformed.
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