The Canadian dollar strengthened against its U.S. counterpart on Monday, paring some of last week’s decline, as oil prices and stocks rallied.
Stocks were boosted by robust sales in the holiday season, after a steep selloff on Wall Street in the previous session.
Canada exports many commodities, including oil, and runs a current account deficit, so its economy could benefit from an improved outlook for the global flow of trade or capital.
The price of oil recovered some of the previous session’s near-7 per cent fall. U.S. crude prices were up 2.7 per cent at $51.77 a barrel.
At 9:44 a.m. (1444 GMT), the Canadian dollar was trading 0.3 per cent higher at 1.3206 to the greenback, or 75.72 U.S. cents. The currency, which fell 0.8 per cent last week, traded in a range of 1.3188 to 1.3230.
The loonie gained despite a report that General Motors Co.
plans to announce as early as Monday it will significantly cut car production in North America and stop building some low-selling car models.
On Sunday, a major Canadian union said it had been told by GM that there would be no product allocated to the plant in Oshawa after December 2019. Auto production is one of Canada’s biggest industries.
Data on Friday showed that Canada’s annual inflation rate remained above the central bank’s target for the ninth straight month in October, but markets saw few signs the Bank of Canada would hike interest rates next month.
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 3 Canadian cents to yield 2.248 per cent and the 10-year declined 17 Canadian cents to yield 2.36 per cent.
On Friday, the 10-year yield touched its lowest in more than two months at 2.33 per cent.
Canada’s gross domestic product data for the third quarter is due on Friday.