TORONTO/OTTAWA: The Canadian dollar strengthened against the greenback on Wednesday after oil prices rose following an unexpected decline in US crude inventories.
The loonie shrugged off a disappointing set of domestic data that showed the economy stalled in October, while retail sales rose less than expected.
The currency touched a session low against the greenback immediately following the reports but it recovered its strength as US crude prices rose 94 cents to $37.08 a barrel. The Canadian dollar has lost nearly 4 percent this month as oil has taken another dive.
"The data I think really compounds the run of very disappointing activity data that we've had in Canada through the late third quarter and into the fourth quarter," said Shaun Osborne, chief currency strategist at Scotiabank. "It really does suggest the economy has taken, at this point anyway, quite a significant dive through the fourth quarter.
"Oil prices certainly have blunted the impact of the data."
The Canadian dollar was at C$1.3887 to the greenback, or 72.01 US cents, stronger than Tuesday's close of C$1.3937, or 71.75 US cents.
The currency's strongest level of the session was C$1.3870, while its weakest level was C$1.3941.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 0.5 Canadian cent to yield 0.516 percent and the benchmark 10-year falling 16 Canadian cents to yield 1.434 percent.
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