TORONTO: The Canadian dollar strengthened against its US counterpart on Monday, adding to recent gains, as easing COVID restrictions in China bolstered investor sentiment and data showed Canada posting the widest current account surplus in nearly 14 years.

World share markets rose and the US dollar was anchored at five-week lows on bets of a possible slowdown in US monetary tightening and after news that Shanghai authorities would from Wednesday cancel many restrictions on businesses.

Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to the outlook for the global economy.

Oil prices climbed to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.

US crude rose 0.6% to $115.7 a barrel, while the Canadian dollar was trading 0.4% higher at 1.2673 to the greenback, or 78.91 US cents, its strongest since April 22.

Canada’s current account surplus grew to C$5.0 billion in the first quarter from a revised C$137 million deficit in the fourth quarter, Statistics Canada said. It was the widest surplus since the second quarter of 2008.

Canada’s GDP data, due on Tuesday, could help guide expectations for the Bank of Canada policy outlook. Money markets expect the central bank to raise its benchmark rate by half a percentage point for a second straight time at a policy decision on Wednesday.

Canadian government bond yields were higher across the curve, with the 10-year up 4.5 basis points at 2.835%.