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Canadian dollar climbs to two-week high as oil rallies

Published 2020-04-29, 10:09 a/m
© Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto
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TORONTO (Reuters) - The Canadian dollar strengthened to a two-week high against its U.S. counterpart as oil rallied and parts of the United States, Europe and Australia gradually ease restrictions to help contain the coronavirus outbreak.

Global market shares rose, with optimism over economies easing coronavirus lockdowns and oil prices clawing back ground leavened by caution over corporate earnings.

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

U.S. crude (CLc1) prices were up about 24% at $15.34 a barrel after U.S. stockpiles rose less than expected and gasoline stocks fell, with support also coming from hopes that demand will improve as lockdowns ease.

At 9:45 a.m. (1345 GMT), the Canadian dollar was trading 0.5% higher at 1.3929 to the greenback, or 71.79 U.S. cents. The currency touched its strongest intraday level since April 15 at 1.3918.

The next governor of the Bank of Canada has room to make an immediate impact on monetary policy, economists say, as the central bank's response to the coronavirus crisis likely shifts from financial market support to boosting economic recovery.

Canada's GDP report for February is due on Thursday but could be too dated to guide expectations for further easing measures from the Bank of Canada.

© Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the

Canadian government bond yields were mixed across the curve, with the 10-year yield near unchanged at 0.565%.

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