TORONTO: The Canadian dollar rose against its weaker US counterpart on Monday after trading near five-year lows earlier in the session, as slumping oil prices recovered some of their recent heavy losses.
Crude prices, which have fallen for five straight months, continued their longest losing streak since the 2008 financial crisis, hitting five-year lows. Prices have dropped more than 12 percent since OPEC's decision last week not to cut crude production.
"Oil seems to have found a temporary base here for now, obviously CAD is benefiting from that. It's also benefiting from the fact that the US dollar is weaker across the board as well," said Brad Schruder, director of foreign exchange sales at BMO Capital Markets, adding that the US dollar was likely seeing some profit-taking.
"Obviously it was a very wild ride last week. It's clear that Canada was hurt by declining oil prices."
At 9:29 a.m. (1429 GMT), the Canadian dollar was at C$1.1370 to the greenback, or 87.95 US cents, stronger than Friday's finish at C$1.1440, or 87.41 US cents.
Earlier in the session, it touched C$1.1459, or 87.27 US cents, just shy of the C$1.1466 hit more than three weeks ago, which was the currency's weakest level since July 2009.
Schruder said last week's price action indicates the market should expect more weakness ahead for the loonie.
This week, investor attention will turn to a slew of central bank decisions around the world, including the Bank of Canada on Wednesday, and key economic data culminating in labor market figures on both sides of the border on Friday.
"It's an extremely busy week with plenty to chew on as far as direction from central banks and economic underpinnings," said Schruder.
Canadian government bond prices were higher across the maturity curve, with the two-year up 3 Canadian cents to yield 0.971 percent and the benchmark 10-year up 2 Canadian cents to yield 1.845 percent.
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