TORONTO: The Canadian dollar strengthened on Tuesday to a nearly one-month high against its US counterpart as oil prices extended recent gains ahead of a meeting of major producers and domestic data showed solid growth in wholesale trade.
The value of Canadian wholesale trade rose by 0.9 percent in March from February to hit a record, pushed up by demand for building materials and supplies, Statistics Canada said.
The data points to a "healthy increase" in gross domestic product for the month, CIBC Capital Markets economist Nick Exarhos said in a research note.
The price of oil, one of Canada's major exports, rose as expectations that the Organization of the Petroleum Exporting Countries and other producers will extend output cuts offset US President Donald Trump's plan to sell off half of the country's huge oil stockpile.
US crude was up 0.20 percent at $51.23 a barrel.
At 9:14 a.m. EDT (1314 GMT), the Canadian dollar was trading at C$1.3464 to the greenback, or 74.27 US cents, up 0.3 percent.
The currency's weakest level of the session was C$1.3509, while it touched its strongest since April 24 at C$1.3457.
Speculators have ramped up bearish bets on the Canadian dollar to a record high, data from the Commodity Futures Trading Commission and Reuters calculations showed on Friday. Canadian dollar net short positions rose to 98,000 contracts as of May 16 from 86,215 a week earlier.
The Bank of Canada is widely expected to hold interest rates at 0.50 percent on Wednesday.
Domestic data on Friday showed that the central bank's measures of core inflation remained muted in April. But some economists worry that leaving low rates in place for too long could lead to too much borrowing and leave the economy vulnerable if growth slows or home prices drop.
Canadian government bond prices were mixed across the yield curve as the market reopened following the Victoria Day holiday on Monday.
The two-year price was flat to yield 0.674 percent, and the 10-year edged up 8 Canadian cents to yield 1.462 percent.
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