TORONTO: The Canadian dollar strengthened to its highest in nearly three weeks against its US counterpart on Thursday as global stock markets extended their winning streak and oil steadied near its highest level in more than a year.

The loonie was trading 0.2% higher at 1.2677 to the greenback, or 78.91 US cents. The currency touched its strongest intraday level since Jan. 22 at 1.2660.

Global shares rose for a ninth day running, sustained by the promise of more free money after a benign US inflation report and a dovish Federal Reserve outlook.

Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.

US crude oil futures were down 0.2% at $58.55 a barrel, paring recent gains, as renewed lockdowns and the emergence of new coronavirus variants weighed on the prospects for a swift demand recovery.

Canadian government bond yields were mixed across the curve. The 10-year rose half a basis point to 0.993%, having touched its highest level since last March earlier in the day at 1.031%.