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Canadian Dollar Hits 3-Month High on Surging Oil and U.S. Trade Hopes
The Canadian dollar strengthened against its U.S. counterpart on Thursday, reaching its highest level in nearly three months, bolstered by a surge in crude oil prices and investor optimism surrounding ongoing trade negotiations between Ottawa and Washington.
The currency gained 0.1% to trade at 1.3790 per U.S. dollar, or 72.52 U.S. cents. During the session, it touched 1.3757, a peak not seen since May 21.
Key Drivers for the Loonie
A primary driver for the commodity-linked currency was a sharp rise in oil prices, one of Canada's most important exports. U.S. crude futures jumped 2% to $87.50 a barrel after U.S. President Donald Trump warned of retaliatory action against countries supporting Iran.
Sentiment was also lifted by developments in Washington, where chief trade negotiators from Canada and the United States met for a second consecutive day. The talks are focused on reaching an agreement to end months of tariffs and counter-tariffs between the two nations.
AdBroader Market Context
The move was also influenced by dynamics in the U.S. dollar, according to Darren Richardson, COO at Vantry Capital Inc. Richardson noted that the greenback has been under pressure due to the expanding size of U.S. government debt, which the Treasury Department announced on Wednesday had surpassed $40 trillion for the first time.
While the U.S. dollar edged slightly higher against a basket of major currencies on Thursday, it had weakened in the previous session after the Treasury took steps to calm a sell-off in the bond market. Separately, Canadian government bond yields rose during Thursday's session.
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