TORONTO: The Canadian dollar strengthened against its U.S. counterpart on Monday, rebounding from a six-week low, as oil prices rose and domestic data showed some easing of inflation pressures.
The price of oil, one of Canada’s major exports, was higher as optimism over the Chinese economy outweighed concern over a global recession.
U.S. crude prices climbed 2% to $75.78 a barrel, while the Canadian dollar was trading up 0.5% at 1.3630 to the greenback, or 73.37 U.S. cents, the biggest gain among G10 currencies.
It moved in a range of 1.3625 to 1.3690, after touching on Friday its weakest level since Nov. 4 at 1.3705.
Producer prices in Canada fell by 0.4% in November from October on lower prices for refined petroleum energy products, while the annual gain slowed to 9.7% from 10.1% in October, data from Statistics Canada showed.
The Bank of Canada missed the mark on rising inflation but a turnaround is near, its governor said in an interview with the Globe and Mail.
Separate data showed that Canadian home prices fell in November from the previous month and at a faster pace than in October, while year-over-year price gains continued to slow.
Canadian government bond yields rose across a steeper curve, with the 10-year up 8.7 basis points at 2.904%.
They were tracking moves in U.S. Treasuries and German Bunds after the U.S. Federal Reserve and European Central Bank last week hiked interest rates and promised more.
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