C$ notches 3-month high as investors bet on economic recovery

TORONTO: The Canadian dollar strengthened to a three-month high against its US counterpart on Monday as hopes of a quick economic rebound from the coronavirus crisis offset lower oil prices.

US stocks rose, with the Nasdaq hitting a record high for the second straight session, after a surprisingly upbeat jobs report last week raised bets of a swift recovery from a coronavirus-driven downturn.

Canada, which also reported surprisingly strong jobs data last week, sends about 75% of its exports to the United States, including oil.

US crude oil futures were down 3.4% at $38.20 a barrel after Saudi Arabia said an extension of output cuts by OPEC+ nations would not include extra voluntary cuts by a trio of Gulf producers.

The Canadian dollar was trading 0.3% higher at 1.3382 to the greenback, or 74.73 US cents. The currency touched its strongest intraday level since March 4 at 1.3369.

Speculators have pared their bearish bets on the Canadian dollar for a second straight week, data from the US Commodity Futures Trading Commission showed on Friday. As of June 2, net short positions had fallen to 33,138 contracts from 33,954 in the prior week.

Canadian housing starts rose to a seasonally adjusted annual rate of 193,453 units in May from 166,477 units in April, the Canadian Mortgage and Housing Corporation said on Monday.

Excluding Quebec, which was left out of the April survey after construction in the province was disrupted by measures to combat the pandemic, starts fell about 20% to 132,576 units.

Canadian government bond yields were mixed across a flatter curve, with the 10-year down 2.8 basis points at 0.705%. On Friday, the 10-year yield touched its highest intraday level since mid-April at 0.768%.