Canadian dollar snaps losing streak as oil prices jump
TORONTO — The Canadian dollar strengthened
against the greenback on Tuesday, recovering from its lowest
level in nearly six weeks, as oil prices rose and investors
weighed U.S. economic data that could reduce expected tightening
by the Federal Reserve.
The loonie was trading 0.7% higher at 1.2960 to the
greenback, or 77.16 U.S. cents, after four straight days of
declines. Earlier, the currency touched its weakest level since
July 15 at 1.3063.
“We have seen the Canadian dollar rally on the back of
strong oil prices,” said Rahim Madhavji, president at
Knightsbridge Foreign Exchange.
The price of oil, one of Canada’s major exports, climbed as
Saudi Arabia floated the idea of OPEC+ output cuts to support
U.S. crude oil futures settled 3.7% higher at $93.74
a barrel, while the U.S. dollar pulled back from a fresh
two-decade high against the euro after a report showed U.S.
private sector activity contracted for a second-straight month
The data “is going to put lesser pressure than would have
been otherwise on the Fed to keep doing outsized rate hikes,”
Fed Chair Jerome Powell is due to speak at the Jackson Hole
economic symposium in Wyoming on Friday.
Canadian government bond yields were higher across the
curve. The 10-year touched its highest since July 21
at 3.086% before dipping to 3.047%, up 3.1 basis points on the
In domestic news, Germany hopes Canadian liquefied natural
gas will help ease its shift away from Russian gas imports,
Chancellor Olaf Scholz said, a day after Canada played down the
economic viability and speed of setting up new export terminals.
(Reporting by Fergal Smith; Editing by Susan Fenton and Alison