TORONTO: The Canadian dollar strengthened against its US counterpart on Wednesday, rebounding from a near one-week low earlier in the session as investors turned more bullish ahead of comments by US Federal Reserve Chairman Jerome Powell.
US stock index futures rose, a day after Wall Street's main indexes fell, with Powell set to speak amid rising bets that the United States might adopt negative interest rates for the first time to combat the coronavirus pandemic's severe economic blow.
Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
US crude prices were down 0.4% at $25.67 a barrel. Potential OPEC+ plans to deepen supply cuts were tempered by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdowns.
The Canadian dollar was trading 0.3% higher at 1.4026 to the greenback, or 71.30 US cents. The currency touched its weakest intraday level since last Thursday at 1.4085.
The Canada-US border is expected to stay closed to non-essential travel until June 21 amid the ongoing novel coronavirus pandemic, according to a report in a widely read Canadian newspaper.
Canadian government bond yields edged lower across the curve in sympathy with US Treasuries. The 10-year yield dipped nearly 1 basis point to 0.536%.