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C$ notches 7-month high as COVID-19 treatment boosts sentiment

Credit: REUTERS/THOMAS WHITE

The Canadian dollar climbed to a seven-month high against its broadly weaker U.S. counterpart on Monday as approval by U.S. regulators of a treatment for COVID-19 patients buoyed risk appetite.

* Canadian dollar rises 0.1% against the greenback

* Loonie touches its strongest since Jan. 24 at 1.3130

* Price of U.S. oil rises 0.9%

* Canadian bond yields trade mixed across the curve

TORONTO, Aug 24 (Reuters) - The Canadian dollar climbed to a seven-month high against its broadly weaker U.S. counterpart on Monday as approval by U.S. regulators of a treatment for COVID-19 patients buoyed risk appetite.

The S&P 500 and Nasdaq were set to open at record highs after the U.S. health regulator approved the emergency use of blood plasma in COVID-19 patients and on a report that the Trump administration may fast-track a vaccine candidate.

Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to prospects for the global flow of trade and capital.

U.S. crude prices were up 0.9% at $42.7 a barrel as storms closed in on the Gulf of Mexico, shutting more than half its oil production, while the safe-haven U.S. dollar weakened against a basket of major currencies.

The Canadian dollar was trading 0.1% higher at 1.3157 to the greenback, or 76.01 U.S. cents. The currency touched its strongest intraday level since Jan. 24 at 1.3130.

Speculators have raised bearish bets on the loonie to the highest since May, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Aug. 18, net short positions had increased to 33,587 contracts from 29,547 in the prior week.

Canada's main opposition Conservative Party on Monday elected Erin O'Toole, a former cabinet minister and armed forces veteran, to be its new leader and the primary challenger to Liberal Prime Minister Justin Trudeau.

Canadian government bond yields were mixed across the curve, with the 10-year up 0.6 basis points at 0.544%.

Bank of Canada Governor Tiff Macklem will speak by videoconference at the Federal Reserve Bank of Kansas City's 2020 Jackson Hole Symposium on Thursday, while gross domestic product data for the second quarter is due on Friday. (Reporting by Fergal Smith; Editing by Will Dunham) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/

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

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