TORONTO – The Canadian dollar strengthened to a near three-week high against its U.S. counterpart on Wednesday, together with gains for other commodity-linked currencies after upbeat global economic data.
A batch of reports from Europe showed that French consumer confidence hit a nine-year high, business activity across the euro zone rose at the fastest pace in more than five years and inflation in the euro zone is its highest in over three years. This followed similarly upbeat reports this week on U.S., British, Chinese and Japanese business activity.
Commodity-linked currencies, such as the Canadian dollar, the Australian and New Zealand dollars tend to benefit more than many others from an upswing in growth.
The U.S. dollar edged down from a 14-year high against a basket of currencies and the prices of oil, one of Canada’s major exports, rose on expectations that U.S. crude inventories are falling and signs that oil producers will stick to agreed output cuts that took effect this week.
U.S. crude prices were up 0.34 percent at $52.51 a barrel.
At 9:19 a.m. ET, the Canadian dollar was trading at C$1.3315 to the greenback, or 75.10 U.S. cents, much stronger than Tuesday’s close of C$1.3433, or 74.44 U.S. cents.
The currency’s weakest level of the session was C$1.3456, while it touched its strongest since Dec. 15 at C$1.3297.
The Australian dollar rose 0.6 percent, while the New Zealand dollar was up 0.5 percent.
Canadian government bond prices were mixed across the yield curve as investors braced for minutes from the December meeting of the U.S. Federal Open Market Committee.
The two-year fell 0.5 Canadian cent to yield 0.769 percent and the 10-year was flat to yield 1.741 percent.
Canada’s trade report for November and employment report for December are due on Friday.