TORONTO: The Canadian dollar strengthened to its highest in nearly three years against its US counterpart on Wednesday, as oil prices rose and Canadian bond yields climbed at a faster pace than their US counterparts.

The loonie was trading 0.1% higher at 1.2580 to the greenback, or 79.49 US cents, having touched its strongest intraday level since April 2018 at 1.2551.

Global shares fell as market participants weighed up signs of economic recovery against fears of inflation.

The price of oil, one of Canada's major exports, rose amid continued outages in the United States but a surprise build in US inventories last week capped gains. US crude prices were up 1.3% at $62.46 a barrel.

Canada's economy will see a solid and sustained rebound this year as inoculations ramp up, Bank of Canada governor Tiff Macklem said on Tuesday, while warning that Canada's red-hot housing market is starting to show signs of "excess exuberance".

Also on Tuesday, US President Joe Biden and Canadian Prime Minister Justin Trudeau sought to turn the page on the Trump era, stressing the countries' deep ties and pledging to work together to counteract Chinese influence and address climate change.

Canadian government bond yields were higher across a steeper curve on Wednesday. The 10-year yield touched its highest since February last year at 1.356% before dipping to 1.333%, up 8.8 basis points on the day.

The gap between Canadian and US 10-year yields narrowed by nearly 4 basis points to 8 basis points in favour of the US bond.