TORONTO: The Canadian dollar strengthened to a three-week high against its broadly weaker US counterpart on Wednesday, although gains were pared as crude oil fell.
The US dollar fell against a basket of major currencies as investors awaited a speech by Federal Reserve Chair Janet Yellen later this month in the absence of new major economic reports that could provide signs of economic strength.
Position squaring has dominated after the market bought the greenback following a robust US jobs report last week, said David Bradley, director of foreign exchange trading at Scotiabank.
The Canadian dollar ended at C$1.3064 to the greenback, or 76.55 US cents, stronger than Tuesday's close of C$1.3123, or 76.20 US cents.
The currency's weakest level of the session was C$1.3122, while it touched its strongest since July 19 at C$1.2990.
Oil fell after the second-biggest weekly draw in US gasoline this summer was countered by an unseasonal build in crude stockpiles. US crude oil futures settled $1.06 lower at $41.71 a barrel.
In quiet summer markets, the Canadian dollar has begun to track fluctuations in crude oil more closely, said Bradley.
Canadian government bond prices were mixed across a flatter maturity curve, with the two-year bond flat to yield 0.508 percent and the benchmark 10-year rising 22 Canadian cents to yield 0.992 percent.
The 10-year yield touched its lowest since July 11 at 0.965 percent.
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