Canadian dollar notches highest since 2015 as greenback slides

TORONTO: The Canadian dollar climbed to a 6-year high against its US counterpart on Tuesday as the greenback broadly declined and investors awaited inflation data on Wednesday that could offer clues on the Bank of Canada policy outlook.

The loonie was trading 0.3% higher at 1.2028 to the greenback, or 83.14 US cents, having touched its strongest level since May 2015 at 1.2013.

The currency has been on a tear since the Bank of Canada in April shifted to more hawkish guidance on its interest rate outlook and cut the pace of bond purchases. It has also been supported by soaring prices for many of the commodities that Canada produces.

Most industrial metals prices rose on Tuesday as investors betting on a long period of low interest rates bought riskier assets, pushing global stock markets higher and dragging the US dollar to its weakest since February.

US crude prices touched the highest since March at $67.01 a barrel before dipping to $66.14, down 0.2% on the day. Economists expect Canadian data due on Wednesday to show inflation

climbing to 3.2% year-over-year in April from 2.2% in March. That would be above the Bank of Canada's target range of 1% to 3%.

US Trade Representative Katherine Tai discussed a range of trade issues with Canadian Trade Minister Mary Ng on Monday and emphasized the need for Canada to implement new North American trade deal commitments on dairy and e-commerce shipments, her office said in a statement.

Canadian government bond yields were lower across a flatter curve, with the 10-year down 1.6 basis points at 1.563%.