The Canadian dollar strengthened to a seven-week high against its broadly weaker US counterpart on Tuesday as oil rose and domestic data showed a rebound in factory sales. The greenback was pummelled by investors tempering bets on the timing and pace of US Federal Reserve rate hikes. But unless prices for oil - a major Canadian export - rally further, strategists see little chance of the Canadian currency's recent gains.
The Canadian dollar ended the day trading at C$1.2853 to the greenback, or 77.80 US cents, firmer compared with Monday's close of C$1.2917, or 77.42 US cents. The currency's weakest level of the session was C$1.2933, and it touched its strongest since June 24 at C$1.2798. Canadian government bond prices were lower across the maturity curve, with the two-year bond down 3.5 Canadian cents to yield 0.567 percent and the benchmark 10-year down 19 Canadian cents to yield 1.066 percent.