Canadian dollar pares weekly decline as oil rallies

TORONTO: The Canadian dollar strengthened against its US counterpart on Friday as oil and equity markets globally rose, but the currency was on track to lose ground for the second straight week.

World shares climbed as hopes for economic recovery and the week's easing of global bond yields helped lift the mood.

The price of oil, one of Canada's major exports, rebounded on concerns it could take weeks to dislodge a giant container ship blocking the Suez Canal, which would squeeze supplies of crude and refined products.

US crude prices were up 2.1% at $59.8 a barrel, while the Canadian dollar was trading 0.3% higher at 1.2572 to the greenback, or 79.54 US cents.

The currency traded in a range of 1.2565 to 1.2612, having touched on Thursday its weakest level in two weeks at 1.2628. For the week, it was on course to decline 0.6% as the US dollar broadly climbed.

The Canadian province of Quebec said on Thursday its budget deficit would narrow in fiscal 2021-22 as its economy rebounds from COVID-19, and return to balance in 2027-2028 ahead of its neighbor Ontario.

Canadian government bond yields were higher across much of a steeper curve, with the 10-year up 3 basis points at 1.501%. Still, it has pulled back from a 14-month high last week at 1.677%.