(Adds strategist quotes and details throughout; updates prices)
* Canadian dollar rises 0.4% against the greenback
* Loonie touches its strongest since Oct. 21 at 1.3099
* Price of U.S. oil settles 2.3% higher
* Canadian bond yields rise across a steeper curve
By Fergal Smith
TORONTO, Nov 3 (Reuters) - The Canadian dollar rose against a broadly weaker greenback on Tuesday amid investor optimism that the outcome of the U.S. election would clear the way for economic stimulus, with the currency building on strong gains from the day before.
Wall Street's main indexes jumped as investors bet that Democrat challenger Joe Biden will win Tuesday's U.S. presidential election and launch a large new stimulus package. prospect of a clear win for Biden "has hit markets early, crushing the (U.S.) dollar, while lifting emerging market and commodity-linked currencies like the Canadian dollar." said Karl Schamotta, chief market strategist at Cambridge Global Payments.
"But considerable uncertainty remains, and the loonie could hit severe turbulence as the swing states are announced this evening," Schamotta said.
Biden is ahead in national opinion polls, but races are tight in battleground states that could tip the election to incumbent President Donald Trump. large economic package would bolster prospects for the Canadian dollar, FX strategists said in a Reuters poll. Strategists expect the loonie to extend its rally over the coming year if the COVID-19 crisis becomes less of a drag on the global economy. price of oil, one of Canada's major exports, rose but concerns over surging coronavirus cases around the world capped further gains. crude oil futures CLc1 settled 2.3% higher at $37.66 a barrel, while the Canadian dollar CAD= rose 0.4% to 1.3165 per U.S. dollar, or 75.96 U.S. cents.
The currency touched its strongest intraday level since Oct. 21 at 1.3099. On Monday, it notched its biggest gain since June 1, rising 0.8%.
Canadian government bond yields were higher across a steeper curve in sympathy with U.S. Treasuries on Tuesday. The 10-year CA10YT=RR rose 3.9 basis points to 0.678%, having touched its highest intraday since Aug. 28 at 0.694%.