Canadian dollar strengthens 0.6% against the greenback
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Trades in a range of 1.3531 to 1.3630
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Price of U.S. oil rises 2.9%
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10-year yield touches a near four-week low
TORONTO, Nov 1 (Reuters) – The Canadian dollar strengthened against its U.S. counterpart on Tuesday, adding to its October gains, as oil prices rose and hopes that central banks are nearing the end of their tightening cycles helped underpin investor sentiment.
Equity markets globally rose and the safe-haven U.S. dollar lost ground against a basket of major currencies ahead of the start of a two-day Federal Reserve policy meeting.
The Fed is expected to hike interest rates by 75 basis points when its meeting concludes on Wednesday but hopes have risen that the U.S. central bank will move to a smaller hike of just 50 basis points at its December meeting.
The price of oil, one of Canada’s major exports, recouped losses from the previous session, as a weaker U.S. dollar offset widening COVID-19 curbs in China that have stoked fears of slowing fuel demand in the world’s second-largest oil consumer.
U.S. crude oil futures rose 2.9% to $89.01 a barrel, while the Canadian dollar was trading 0.6% higher at 1.3538 to the greenback, or 73.87 U.S. cents, after moving in a range of 1.3531 to 1.3630.
The currency rallied 1.5% last month.
The Bank of Canada has already downshifted the pace of its tightening at an interest rate decision last week. BoC Governor Tiff Macklem is due to appear before a Canadian Senate committee at 6:30 p.m. ET (2230 GMT).
Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries.
The 10-year touched its lowest level since Oct. 5 at 3.153% before rebounding slightly to 3.187%, down 6.3 basis points on the day. (Reporting by Fergal Smith; editing by Jonathan Oatis)
