Canadian dollar snaps losing streak as oil prices jump


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TORONTO — The Canadian dollar strengthened

against the greenback on Tuesday, recovering from its lowest

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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

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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

prices.

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

in August.

The data “is going to put lesser pressure than would have

been otherwise on the Fed to keep doing outsized rate hikes,”

Madhavji said.

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

day.

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

Williams)



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