TORONTO: The Canadian dollar firmed against the greenback on Tuesday, as the US dollar slid against a basket of currencies and oil prices climbed on promises by major producers to help control oversupply.
The combination of a weaker US dollar, higher oil prices and robust economic data helped push the Canadian dollar to its strongest level in 14 months on Monday, breaching the C$1.25, or 80 US cents, level.
At 9:10 a.m. ET (1310 GMT), the Canadian dollar was trading at C$1.2489 to the greenback, or 80.07 US cents, up 0.2 percent.
The currency's strongest level of the session was C$1.2487, while its weakest level was C$1.2526.
The next key level analysts are eyeing is C$1.2461, or 80.25 US cents, hit in May 2016.
The currency has gained some 10 percent since early May, while the spread between yields of Canadian and US 2-year bonds has narrowed sharply since June and sits at 7.2 basis points, its narrowest in more than a year.
The US dollar fell to a more than one-year low against its rivals ahead of a two-day Federal Reserve meeting that starts later on Tuesday. Markets are giving a less than 50 percent probability of a interest rate increase before the end of the year, according to CME's Fed watch tool.
Prices of crude oil, a key Canadian export, strengthened further after Saudi Arabia promised to curb exports and the Organization of the Petroleum Exporting Countries and non-OPEC producers discussed extending their deal to cut output beyond March 2018 if necessary.
US crude prices were up 2.03 percent to $47.28 a barrel.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 5.5 Canadian cents to yield 1.307 percent and the benchmark 10-year falling 54 Canadian cents to yield 1.987 percent.
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