Oil prices, loonie rise after Hillary Clinton’s FBI election boost

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. Jeff McIntosh/Canadian Press

TORONTO – The Canadian dollar gained against a broadly stronger U.S. counterpart on Monday as oil prices rose after U.S. Democratic presidential nominee Hillary Clinton got a boost ahead of Tuesday’s election.

The FBI said on Sunday that Clinton would not face criminal charges related to her use of a private e-mail server. A Clinton victory is seen as less of a threat to Canada’s trade-intensive economy.

“We’ve seen a bit of a pop in crude oil prices, which is helping the Canadian dollar out a bit,” said Shaun Osborne, chief currency strategist at Scotiabank.

“I think it’s a little bit of relief that maybe the election is not going to deliver the shock that had been feared last week.”

READ MORE: BC lays out West Coast spill response needs

U.S. Republican presidential candidate Donald Trump, who opinion polls showed gaining on Clinton recently, has said he would renegotiate or scrap the North American Free Trade Agreement if he is elected.

Story continues below advertisement

The Reuters/Ipsos States of the Nation project on Monday showed Clinton will a 90 percent chance of defeating Trump.

Oil rose, helped by a commitment from OPEC to stick to a deal to cut output, but prices remained more than $7 below last month’s high due to persistent doubts over the feasibility of the group’s plan. U.S. crude prices settled up 1.9 percent at $44.89 a barrel.

Canada is a major oil exporter.

The Canadian dollar settled at C$1.3372 to the greenback, or 74.78 U.S. cents, stronger than Friday’s close of C$1.3403, or 74.61 U.S. cents.

READ MORE: Oil industry group projects modest rebound for oil and gas drilling in 2017

The currency’s strongest level of the session was C$1.3300, while its weakest was C$1.3416.

On Friday, the loonie hit its weakest level since March at C$1.3466.

Against the Mexican peso, the Canadian dollar touched its weakest level since Oct. 26, at 13.8646 pesos.

The peso strengthened on increased bets of a Clinton victory. It had been losing strength in recent sessions as opinion polls showed the race tightening.

READ MORE: Oil prices fall but Canadian dollar’s decline stemmed by US election uncertainty

Mexico, along with the United States and Canada, is a member of NAFTA.

Story continues below advertisement

Speculators raised bearish bets on the Canadian dollar to the most since March, Commodity Futures Trading Commission data showed on Friday. Net short Canadian dollar positions rose to 15,960 contracts in the week ended Nov. 1 from 13,324 in the prior week.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries as investors reduced demand for safe-haven assets.

The two-year bond fell 6 Canadian cents to yield 0.553 percent, and the benchmark 10-year <CA10YT=RR> declined 57 Canadian cents to yield 1.222 percent.

Sponsored content