TORONTO: The Canadian dollar edged higher against its US counterpart on Monday as higher oil prices offset broad-based gains for the greenback, with the loonie faring better than nearly all the other G10 currencies.

The price of oil, one of Canada's major exports, was supported by concerns over shut output in the United States because of damage from Hurricane Ida.

US crude rose 1.2% to $70.53 a barrel, while the Canadian dollar was trading 0.2% higher at 1.2665 to the greenback, or 78.96 US cents. The currency traded in a range of 1.2662 to 1.2694.

Among G10 currencies, only the Norwegian crown had a bigger gain. Norway is also a major producer of oil.

Data on Friday showed that Canadian employment has climbed to within 1% of pre-pandemic levels but the boost the loonie got from the data was offset by uncertainty ahead of the Sept. 20 federal election and broad-based gains for the US dollar.

Canadian dollar retreats after surprise GDP contraction

The greenback on Monday strengthened to a two-week high versus a basket of major currencies as market expectation builds that the Federal Reserve could taper its stimulus sooner rather than later despite a surge in COVID-19 cases.

Speculators have raised their bearish bets on the loonie, data from the US Commodity Futures Trading Commission showed on Friday. As of Sept. 7, net short positions had increased to 6,010 contracts from 2,848 in the prior week.

Canadian government bond yields were lower across a flatter curve, with the 10-year down 2.2 basis points at 1.215%.