TORONTO: The Canadian dollar firmed slightly on Wednesday against its US counterpart as the price of oil, a key Canadian export, held near highs not seen since 2015.
Trading was expected to be driven mostly by flows, however, as the year winds to a close and many Canadian participants are off during a holiday-shortened work week.
"Today, tomorrow, Friday are going to be completely driven by, obviously, flows," said Brad Schruder, director, foreign exchange sales at BMO Capital Markets. "It's about liquidity, it's about end-of-year flows, end-of-quarter flows."
At 9:56 AM ET (1456 GMT), the Canadian dollar was trading at C$1.3573 to the greenback, or 73.68 US cents, marginally firmer than Tuesday's close of C$1.3577, according to Thomson Reuters data.
It was weaker, however, compared to the Bank of Canada's last official close of C$1.3535, or 73.88 US cents on December 23.
The currency's strongest level of the session was C$1.3561, while its weakest level was C$1.3598.
US crude prices were up 0.45 percent to $54.14 a barrel, while Brent crude added 0.68 percent to $56.47.
Oil prices edged up for a fourth consecutive session on Wednesday, close to their peaks since mid-2015, with the market awaiting evidence of OPEC supply reductions in the new year.
Earlier in the session, the currency was modestly weaker against the US dollar, which rose after data showed US consumer confidence shot to its highest in more than 15 years in December bolstered by expectations the economy will further improve under President-elect Donald Trump.
Canadian government bond prices were mostly higher across the maturity curve, with the two-year price up 1 Canadian cent to yield 0.791 percent and the benchmark 10-year rising 22 Canadian cents to yield 1.771 percent.
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