Canadian dollar recovers from near 2-week low as oil climbs

TORONTO: The Canadian dollar edged higher against its US counterpart on Tuesday along with rising oil prices, with the currency clawing back some ground after hitting its weakest in nearly two weeks the day before.

The loonie was trading 0.2% higher at 1.2763 to the greenback, or 78.35 US cents, having traded in a range of 1.2732 to 1.2791.

It hit its weakest since Dec. 29 at 1.2835 on Monday, when investors worried that attempts to impeach US President Donald Trump could delay the Joe Biden administration's first moves on stimulus.

Canada sends about 75% of its exports to the United States, including oil. US crude oil futures were up 1% at $52.77 a barrel, as tighter supply and expectations of a drop in US inventories offset concerns over rising coronavirus cases globally.

On Monday, a Bank of Canada survey showed that business sentiment in the country has turned slightly positive for the first time since the COVID-19 pandemic began. The central bank is due to make an interest rate decision next week.

Canadian government bond yields were higher across much of the curve on Tuesday. The 10-year rose 1.6 basis points to 0.859%, having touched its highest intraday since March 27 at 0.876%.

Ontario, Canada's most populous province, is widely expected to announce further pandemic restrictions later today after health authorities release new case modeling.