C$ tracks oil higher as investors weigh trade deal prospects

TORONTO: The Canadian dollar strengthened against its US counterpart on Friday, performing better than most of its peers, as oil prices rose and investors weighed prospects of a trade deal between the United States and China ahead of a March 1 deadline.

US stocks climbed as trade talks between the US and China advanced, although worries of a cooling domestic economy kept a lid on gains.

Canada is a major producer of commodities, including oil, so its economy could benefit from a US-China trade deal that reduces global economic uncertainty.

US crude oil futures rose nearly two percent to $55.47 a barrel as this week's announcement of a higher-than-expected supply cut by Saudi Arabia encouraged investors.

At 9:53 a.m. (1453 GMT), the Canadian dollar was trading 0.3 percent higher at 1.3262 to the greenback, or 75.40 US cents. Among G10 currencies, only the New Zealand dollar fared better.

The loonie, which touched on Thursday its weakest intraday level in nearly three weeks at 1.3340, traded in a range of 1.3257 to 1.3313. For the week, the loonie is on track to gain 0.2 percent.

Canadian home sales rose 3.6 percent in January from the previous month but remained below levels posted one year ago, the Canadian Real Estate Association said on Friday.

Separate data, from Statistics Canada, showed that foreign investors sold a net C$18.96 billion in Canadian securities in December, led by a record divestment in bonds. This was the highest divestment since October 2007.

Canadian government bond prices were lower across the yield curve in sympathy with US Treasuries. The two-year fell 4 Canadian cents to yield 1.785 percent and the 10-year declined 27 Canadian cents to yield 1.908 percent.