TORONTO: The Canadian dollar strengthened against its US counterpart on Monday, rebounding from a nine-day low on Friday, as oil prices soared following a weekend attack on Saudi Arabian oil facilities.
US crude oil futures rallied 9.7% to $60.19 a barrel after the attack halved Saudi Arabia's oil production. Oil is one of Canada's major exports.
At 10:16 a.m. (1416 GMT), the Canadian dollar was trading 0.3% higher at 1.3254 to the greenback, or 75.45 US cents. The currency, which on Friday hit its weakest intraday level since Sept. 4 at 1.3291, traded in a range of 1.3208 to 1.3266.
Gains for the loonie came as data from the Canadian Real Estate Association showed Canadian homes sales rose 1.4% in August from July, the sixth consecutive month of increased activity.
Meanwhile, foreign investors reduced their holdings of Canadian securities by C$1.2 billion in July, while Canadian investment in foreign securities increased by C$12.5 billion, according to data from Statistics Canada.
Still, speculators have raised their bullish bets on the Canadian dollar for the first time in five weeks, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Sept. 10, net long positions had increased to 11,523 contracts from 5,349 in the prior week.
Canadian government bond prices were higher across the yield curve in sympathy with US Treasuries on Monday. The two-year rose 0.5 Canadian cents to yield 1.636% and the 10-year was up 19 Canadian cents to yield 1.491%.
On Friday, the 10-year yield touched its highest since July 19 at 1.521%.
Canada's inflation report for August is due on Wednesday, which could help guide expectations for the Bank of Canada's interest rate outlook.