US Markets

C$ gains along with higher oil prices as greenback sinks

Credit: REUTERS/Mark Blinch

The Canadian dollar strengthened against its U.S. counterpart on Monday as oil prices rose and the greenback again declined against a basket of major currencies, with the loonie approaching a six-week high notched last week.

(Adds dealer quotes and details; updates prices)

* Canadian dollar rises 0.4% against the greenback

* Loonie trades in a range of 1.3354 to 1.3413

* Price of U.S. oil increases 0.8%

* Canadian government bond yields edge higher

* Canada's 10-year yield hits its lowest since June 15 at 0.482%

By Fergal Smith

TORONTO, July 27 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday as oil prices rose and the greenback again declined against a basket of major currencies, with the loonie approaching a six-week high notched last week.

The U.S. dollar fell to its lowest level since June 2018, weighed by deteriorating U.S.-China relations and concerns about the U.S. economy as COVID-19 infections climbed.

"We have seen U.S. dollar weakness pretty much across the board," said Rahim Madhavji, president at KnightsbridgeFX.com. "At the end of the day weakness in the U.S. dollar is typically a risk-on event for the market."

Wall Street's main indexes were higher as investors monitored progress in government stimulus efforts, while the price of oil , one of Canada's major exports, settled 0.8% higher at $41.60 a barrel.

The Canadian dollar was trading 0.4% higher at 1.3366 to the greenback, or 74.82 U.S. cents. The currency traded in a range of 1.3354 to 1.3413.

Last Thursday, the loonie touched its strongest intraday level since June 10, at 1.3347.

Data on Friday showed that speculators have reduced their bearish bets on the loonie to the lowest point since mid-March.

Canadian government bond yields edged higher across much of the curve on Monday along with higher yields on U.S. Treasuries.

The 10-year yield was up 0.7 basis point at 0.514, having earlier touched its lowest intraday level since June 15 at 0.482%.

The Federal Reserve at the close of its two-day policy meeting on Wednesday could confirm recent hints about the benefits of an average inflation target, which would allow rates to stay lower for longer.

Canada's GDP report for May is due on Friday. (Reporting by Fergal Smith Editing by Nick Zieminski and Leslie Adler) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/ (UPDATE 1)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More