TORONTO: The Canadian dollar on Monday bounced back from a seven-week low in the previous session as oil prices rebounded and global equity markets climbed.
Gains for the loonie follow a 1.3 percent decline last week when lower crude prices weighed on commodity-linked currencies, also weakened by concern that leading central banks may not expand monetary stimulus.
On Monday, oil prices rose from multi-week lows after Venezuela said OPEC and non-OPEC producers were close to a deal to stabilize the crude market and as clashes in Libya disrupted attempts to boost crude exports. US crude prices were up 0.74 percent to $43.35 a barrel.
The US dollar fell from a two-week high as investors braced for central bank policy decisions in Japan and the United States on Wednesday.
At 9:20 a.m. EDT (1320 GMT), the Canadian dollar was trading at C$1.3165 to the greenback, or 75.96 US cents, stronger than Friday's close of C$1.3214, or 75.68 US cents.
The currency's strongest level of the session was C$1.3135, while its weakest was C$1.3230.
Mexico's peso weakened slightly on Monday from a record low close on Friday, within sight of the 20 pesos per US dollar psychological level.
The peso's plunge is seen putting further pressure on Canadian exporters to the US market, because it could make Mexico's goods more competitively priced in US dollars than those from Canada.
Speculators pared bullish bets on the Canadian dollar for the second straight week, Commodity Futures Trading Commission data showed on Friday.
Canada's autoworkers' union Unifor and General Motors Co made little progress resolving the key issue of new investment in contract talks late on Sunday, the union's president said, just over 24 hours ahead of a strike deadline."
Canadian government bond prices were mixed across the yield curve, with the two-year bond flat to yield 0.581 percent and the benchmark 10-year falling 7 Canadian cents to yield 1.197 percent.
Bank of Canada Governor Stephen Poloz will give a speech in Quebec City on Tuesday on the topic of "Living With Lower for Longer", followed by a press conference. Investors will be looking to see whether Poloz emphasizes the downbeat tone of the recent policy statement.
Canadian inflation and retail sales data are due on Friday. The annual inflation rate is forecast to have edged up to 1.4 percent in August, while investors will be looking for signs that the federal government's new child benefit checks gave a boost to retail sales.
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