- In the bond market, Canadian government bonds were higher across the board in line with U.S. Treasuries.
NEW YORK: The Canadian dollar firmed against the U.S. currency on Monday, lifted by the greenback's broad weakness on optimism about a Brexit trade deal as well as continued progress in the roll-out of COVID-19 vaccines around the world.
So far this month, the Canadian currency has gained 2.2pc against its U.S. counterpart.
Risk appetite grew overall after European Union Brexit negotiator Michel Barnier said on Monday that a trade agreement with Britain was still possible before the country's final break with the 27-nation bloc on Dec. 31.
"The willingness for EU and UK Brexit negotiators to continue trade talks, despite the passage of Sunday's soft deadline has been the major driver behind broad U.S. dollar weakness and USD/CAD's offered tone to start to the week," said Erik Bregar, head of FX strategy at Exchange Bank of Canada in a research note.
In early morning trading, the Canadian dollar rose against the U.S. dollar, with the latter falling 0.3pc to C$1.2730.
Since late October, the Canadian dollar has risen 5pc.
Also helping the Canadian currency was news that Canada's first COVID-19 inoculations are set to begin as soon as Monday after some of the 30,000 doses of the Pfizer/BioNTech vaccine arrived over the weekend.
U.S. crude futures rose 1.2pc to $41.12 per barrel, helping the loonie's cause as well.
In the bond market, Canadian government bonds were higher across the board in line with U.S. Treasuries.
The Canadian 10-year yield was up at 0.748pc, from 0.716pc late on Friday.