TORONTO: The Canadian dollar strengthened against its US counterpart on Thursday, approaching last week's eight-month high, as oil prices rose and as the greenback broadly declined following dovish comments by Federal Reserve Chair Jerome Powell.

The US dollar was stuck at a five-day low after Powell on Wednesday kept the door open for US interest rate cuts.

In contrast, the Bank of Canada made clear on Wednesday it had no intention of easing monetary policy even as it highlighted the risks trade wars posed to the global economy.

The price of oil, one of Canada's major exports, rose as oil rigs in the Gulf of Mexico were evacuated ahead of a storm, while an incident involving a British tanker in the Middle East highlighted tensions in the region. US crude oil futures were up 0.2% at $60.52 a barrel.

At 8:53 a.m. (1253 GMT), the Canadian dollar was trading 0.2% higher at 1.3052 to the greenback, or 76.62 US cents. The currency, which last Thursday notched an eight-month high at 1.3038, traded in a range of 1.3042 to 1.3080.

New home prices in Canada fell 0.1% in May, after prices were flat for the previous three months, Statistics Canada said on Thursday.

Canada's yield curve steepened in sympathy with US Treasuries after data showing US underlying consumer prices increased by the most in nearly 1-1/2 years in June.

The two-year rose 1.5 Canadian cents to yield 1.577% and the 10-year was down 5 Canadian cents to yield 1.591%.