TORONTO: The Canadian dollar strengthened against its US counterpart on Thursday as more central banks took steps to fight back against inflation and domestic data showed wholesale trade climbing in October.

World stocks marched back towards record highs as surging inflation saw Britain and Norway hike interest rates after the US Federal Reserve accelerated its stimulus withdrawal.

On Wednesday, Bank of Canada Governor Tiff Macklem said that slack in Canada’s economy caused by the coronavirus pandemic has substantially diminished, a key sign the central bank is set to begin hiking rates soon.

Canadian wholesale trade rose by 1.4% in October from September to a record high on an increase in sales in motor vehicles and motor vehicle parts and accessories, Statistics Canada said.

Separate data, from payroll services provider ADP, showed that Canada added 231,800 jobs in November, the biggest increase since March, led by a pick-up in hiring in the leisure and hospitality sector.

The Canadian dollar strengthened 0.4% to 1.2774 per greenback, or 78.28 US cents, after trading in a range of 1.2764 to 1.2857.

On Wednesday, the loonie touched its weakest intraday level since Aug. 20 at 1.2936 before rebounding as stocks rallied following the Fed decision.