The Canadian dollar strengthened against its US counterpart on Wednesday after domestic data showed wholesale trade rose more than expected in October, which could bode well for economic growth at the start of the fourth quarter. Increased purchases of machinery and equipment, as well as household goods, drove the value of Canadian wholesale trade up 1.5 percent, data showed.
That could mean October growth data, due on Friday, could come in stronger than forecast, though Thursday's retail sales report will also be key, Nick Exarhos, economist at CIBC, wrote in a note. The Canadian dollar touched a session high of C$1.2819 after the data was released, its highest since December 15.
An uptick in oil prices also lent support to the loonie as crude rose on expectations of a fall in US inventories. Canadian government bond prices were largely lower across the maturity curve, with the two-year price down to yield 1.634 percent and the benchmark 10-year.
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