The Canadian dollar edged higher against its U.S. counterpart on Wednesday, as hopes rose that major oil producers will maintain production limits next year and the prospect of a coronavirus vaccine supported investor sentiment.
The loonie was up 0.1% at 1.2922 per U.S. dollar, or 77.39 U.S. cents. The currency touched its strongest intraday level since October 2018 at 1.2916.
The Canadian dollar got a boost “as oil prices rallied following reports OPEC may be near a deal to extend production caps through Q1 (the first quarter) of 2021,” Ronald Simpson, managing director, global currency analysis at Action Economics, said in a note.
Canada is a major producer of oil, which settled 1.6% higher at $45.28 a barrel.
Britain’s approval of a COVID-19 vaccine boosted hopes for a demand recovery, adding to support for crude. It also helped keep global stock markets near record highs.
Canadian health authorities should soon complete their regulatory review of Pfizer Inc’s vaccine candidate, Health Minister Patty Hajdu said.
Canadian labor productivity fell by a record 10.3% in the third quarter, as hours worked rebounded faster than business output, Statistics Canada said. That follows a record increase in the second quarter, which was marked by lockdown measures imposed because of the coronavirus pandemic.
Canada’s jobs report for November is due on Friday, which could help guide expectations for the Bank of Canada policy outlook. The central bank, which has cut its benchmark interest rate to a record low of 0.25%, is due to make a policy decision next week.
Canadian government bond yields were higher across the curve, with the 10-year up 3 basis points at 0.767%. It touched its highest intraday level since Nov. 13 at 0.780%.
– Reuters