Canadian dollar steadies near multi-week high as oil rallies

TORONTO: The Canadian dollar was little changed against its US counterpart on Tuesday, holding near its highest level in over five weeks as oil prices climbed and investors turned attention to a Federal Reserve interest rate meeting.

The price of oil, one of Canada's major exports, rose before a meeting of the producer group OPEC+ to discuss oil output policy amid concern India's coronavirus crisis could dent a recovery in fuel demand.

US crude prices were up 1.1% at $62.58 a barrel, while the Canadian dollar was trading nearly unchanged at 1.2398 to the greenback, or 80.66 US cents. It traded in a range of 1.2388 to 1.2418.

On Monday, the loonie touched its strongest intraday level since March 18 at 1.2379, supported by the Bank of Canada's more hawkish stance.

Bank of Canada Governor Tiff Macklem is due to appear before the House of Commons Standing Committee on Finance at 4:00 p.m. ET (2000 GMT).

In contrast, the Fed is not expected to change its policy guidance at the end of its two-day meeting on Wednesday.

Canada will send the armed forces and Red Cross to Ontario to help the country's most populous province as it struggles to cope with a surge in hospitalizations from COVID-19, the country's public safety minister said on Monday.

Ottawa has lined up billions in new spending to provide emergency support during a virulent third wave of COVID-19.

Still, S&P Global Ratings on Monday affirmed its AAA rating for Canada, saying it expects the country's economy to post a strong recovery in 2021.

Canadian government bond yields were mixed across the curve, with the 10-year up 1 basis points at 1.540%.

Canadian retail sales data for February is due on Wednesday, while GDP data for the same month is due on Friday.