C$ steadies against rebounding greenback as oil climbs

TORONTO: The Canadian dollar was little changed against its US counterpart on Wednesday as higher oil prices offset broader gains for the greenback, with the loonie steadying after it pulled back from a near eight-month high the day before.

The loonie was trading nearly unchanged at 1.3065 to the greenback, or 76.54 US cents. The currency, which on Tuesday posted its strongest intraday level since Jan. 8 at 1.2990, traded in a range of 1.3053 to 1.3084.

The price of oil, one of Canada's major exports, was supported by a report that US crude inventories fell and as surveys showing stronger manufacturing raised hopes of a recovery from the coronavirus pandemic.

US crude prices were up 0.5% at $42.98 a barrel, while the US dollar extended its rebound from a two-year low against a basket of major currencies.

"Expect the CAD to generally track the broader tone of the USD for now ... that might mean the CAD can regain a bit more ground on the crosses," strategists at Scotiabank, including Shaun Osborne, said in a note.

Against the euro, the Canadian dollar advanced about 0.4%, while it was up about 0.5% against the Australian dollar.

Canadian labor productivity rose at a record pace in the second quarter, climbing 9.8%, as hours worked fell at a much faster pace than business output, Statistics Canada said.

Canada's jobs report for August is due on Friday, which could offer clues on the strength of economic recovery from the coronavirus crisis. Data on Tuesday showed that Canadian manufacturing activity accelerated in August to its fastest pace in two years.

Canadian government bond yields were little changed across the curve on Wednesday, with the 10-year flat at 0.577%.