Canadian dollar notches a 2-week high as oil rebounds nearly 6pc

TORONTO: The Canadian dollar strengthened to a two-week high against its US counterpart on Monday as the price of oil, one of Canada's major exports, rebounded and the greenback broadly declined, with investors eying domestic jobs data later in the week.

The loonie was trading 0.3% higher at 1.3262 to the greenback, or 75.40 US cents. The currency touched its strongest intraday level since Sept. 21 at 1.3257.

The currency "has likely got a boost from US dollar weakness and a rebound in the oil price," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

The safe-haven US dollar dipped on optimism that US lawmakers will agree on new stimulus to blunt the economic impact of the coronavirus pandemic and after US President Donald Trump said he would leave the hospital where he is being treated for COVID-19.

US crude oil futures settled 5.9% higher at $39.22 a barrel, while shares on Wall Street also rallied.

Canada's trade report for August is due on Tuesday, while the September employment report is set for Friday.

The jobs report will help show the strength of economic recovery and whether "the Bank of Canada needs to do anything, anytime soon or does it stay the course," Cieszynski said.

The central bank has said it will hold interest rates at near zero until economic activity returns to full capacity.

Canadian government bond yields were higher across a steeper curve in sympathy with US Treasuries on Monday. The 10-year rose 4.7 basis points to 0.615%, which was its highest level since Sept. 1.