TORONTO: The Canadian dollar strengthened against its U.S. counterpart on Thursday as investors grew more hopeful that lawmakers in Washington would agree to a stimulus bill, with the loonie approaching the 2-1/2-year high it touched earlier this week.

World stocks scaled new peaks after lawmakers and aides said that Congressional negotiators were closing in on a $900 billion COVID-19 aid bill in the United States.

The safe-haven U.S. dollar fell against a basket of major currencies and the price of oil, one of Canada's major exports, moved higher. U.S. crude oil futures were up 0.6pc at $48.12 a barrel.

The Canadian dollar was trading 0.3pc higher at 1.2707 to the greenback, or 78.70 U.S. cents, having traded in a range of 1.2697 to 1.2750. On Tuesday, the loonie touched its strongest level since April 2018 at 1.2684.

Canadian home prices rose 0.9pc in November from October, the Teranet-National Bank Composite House Price Index showed. It was the strongest gain for the month in the index's 22 years.

Household spending has so far led Canada's economic recovery but to be sustainable, exports, productivity and business investment need to do better, Bank of Canada Governor Tiff Macklem said on Tuesday.

Canada's retail sales report for October is due on Friday.

Canadian government bond yields were little changed across the curve, with the 10-year up 0.3 basis points at 0.731pc.