C$ posts fourth straight quarterly gain on improving growth outlook

TORONTO: The Canadian dollar strengthened against its US counterpart on Wednesday and advanced for a fourth straight quarter, as data showed faster-than-expected growth in the domestic economy and the Bank of Canada expressed concern about housing prices.

The Canadian dollar was up 0.6% at 1.2560 to the greenback, or 79.62 US cents, having recovered from its lowest intraday level in nearly three weeks on Tuesday at 1.2646.

For the month, the loonie rose 1.4%, while it was also up 1.4% for the quarter, the strongest performance among G10 currencies.

The Canadian economy grew 0.7% in January, surpassing estimates for 0.5%, largely on increases in wholesale trade and manufacturing, Statistics Canada said. A flash estimate pointed to a 0.5% gain in February.

"The growth outlook for this year continues to brighten amid sizable fiscal stimulus, an ultra-accommodative central bank, and good news on the vaccines," said Ryan Brecht, a senior economist at Action Economics.

Pfizer Inc has agreed to accelerate the delivery of its COVID-19 vaccine to Canada, and some doses of the Johnson & Johnson inoculation are due to arrive at the end of April, Canadian officials said on Tuesday.

Bank of Canada Governor Tiff Macklem, speaking in a newspaper interview, said he saw worrying signs that household indebtedness was worsening as housing prices continue to soar.

Technology shares led the S&P 500 to a record high, with investors awaiting details on US President Joe Biden's massive infrastructure plan.

Canada sends about 75% of its exports to the United States, including oil. US crude prices settled 2.3% lower at $59.16 a barrel on concerns about the market's recovery after OPEC and its allies lowered their 2021 demand growth forReuters

Canadian government bond yields rose across a steeper curve in tandem with US Treasuries.

The 10-year was up 3 basis points at 1.564%.