Canadian dollar notches a 12-day high as oil climbs

TORONTO: The Canadian dollar edged up against its US counterpart on Monday, adding to its gains from Friday, as oil prices rose to their highest level in more than a year and data showed speculators raising bullish bets on the currency.

The loonie was trading 0.1% higher at 1.2738 to the greenback, or 78.49 US cents, having touched its strongest level since Jan. 27 at 1.2731.

It gained 0.6% on Friday despite data showing Canada lost far more jobs than expected in January, while it has climbed about 15% since March.

As of Feb. 2, speculators had raised net long positions in the Canadian dollar to the most since last February, data from the US Commodity Futures Trading Commission showed on Friday.

"Rising oil and natural gas prices, along with other commodities appear to be giving the loonie a tailwind at the moment," said Colin Cieszynski, chief market strategist at SIA Wealth Management. The price of oil, one of Canada's major exports, was boosted by supply cuts among key producers and hopes for further US economic stimulus.

US crude oil futures settled nearly 2% stronger at $57.97 a barrel, while Wall Street climbed to record highs.

Canada's most populous province of Ontario said it would extend a stay-at-home order in Toronto and nearby suburbs by two weeks, but residents of three largely rural public health regions can leave their homes starting on Wednesday.

The Bank of Canada has forecast that the economy will contract in the first quarter as lockdowns weigh on activity. Deputy Governor Timothy Lane is due to speak on Wednesday.

Canadian government bond yields were mixed across a steeper curve, with the 10-year up 1.2 basis points at 1.011%. It touched its highest intraday level since March last year at 1.027%.