TORONTO: The Canadian dollar hit a two-week high against its US counterpart on Tuesday, helped by the price of crude oil nearing a 2015 peak.
The loonie, as Canada's currency is colloquially known, has struggled against the greenback in recent months on the back of slumping crude coupled with a shock interest rate cut.
Oil's rise to $62 a barrel helped reinvigorate the currency of Canada, a major crude producer, although it may not be enough to support it over the longer term, one strategist said.
"With the degree that the Canadian dollar collapsed, almost, in January, there's some risk that was overshooting ... and we could spend the next few weeks consolidating or even reversing before the trend reasserts itself," said Adam Cole, head of foreign exchange strategy at Royal Bank of Canada.
Investors did not seem to panic as Greece and its eurozone creditors broke off debt talks without a deal.
"Markets are quite risk-tolerant today," Cole said. "It's hard to put a finger on (the reason for) it."
The Canadian dollar was at C$1.2380 to the greenback, or 80.76 US cents, stronger than Friday's official Bank of Canada close of C$1.2461, or 80.25 US cents. Trading was limited on Monday due to North American holidays, when the loonie closed at C$1.2465, according to Thomson Reuters data.
Canadian government bond prices were lower across the maturity curve, with the two-year down 2 Canadian cents to yield 0.438 percent and the benchmark 10-year down 42 Canadian cents to yield 1.468 percent.
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