C$ climbs to 2-week high as Biden transition boosts Wall Street

TORONTO: The Canadian dollar strengthened to a two-week high against the greenback on Tuesday, as news that US President-elect Joe Biden got the formal go-ahead to begin his White House transition lifted investor sentiment.

The Canadian dollar was trading 0.6% higher at 1.3003 to the greenback, or 76.91 US cents. It touched its strongest intraday level since Nov. 10 at 1.3002.

"Stock market gains are positive for high-beta currencies like the CAD," said Shaun Osborne, chief currency strategist at Scotiabank.

High-beta assets tend to be more sensitive to changes in risk appetite than the broader market. Canada runs a current account deficit and is a major exporter of commodities, including oil.

"Stocks are reflecting investor hopes that vaccine progress will pave the way for an economic rebound in the coming year," Osborne said. "Sentiment has also been cheered by signs that the presidential transition process may be starting to smooth out."

The Dow Jones Industrial Average breached 30,000 points for the first time, while US crude oil futures settled 4.3% higher at $44.91 a barrel.

As risk appetite improved, the US dollar fell against a basket of major currencies.

Canadian manufacturing sales in October most likely rose by 0.6% on higher sales of petroleum and other resources, following a 1.5% gain in September, Statistics Canada said in a flash estimate.

It follows a separate October flash estimate on Monday, showing wholesale trade rose 0.9%.

Canadian government bond yields rose across much of a steeper curve, with the 10-year up 2.5 basis points at 0.716%.