Canadian dollar strengthens as oil climbs to near three-month high

Mon Oct 3, 2016 4:41pm EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened slightly against a firmer U.S. counterpart on Monday as oil rose to its highest intraday level in nearly three months.

U.S. crude CLc1 prices settled up 57 cents at $48.81 a barrel as Iran exhorted the need for other oil producers to join the Organization of Petroleum Exporting Countries in supporting the market. [O/R]

Modest gains for the loonie followed data on Friday that showed Canada's economy got off to a stronger-than-expected start in the third quarter.

The data has reduced pressure on the Bank of Canada to cut interest rates in the near term, said Mazen Issa, senior foreign exchange strategist at TD Securities.

The central bank would prefer that the U.S. Federal Reserve do the "heavy lifting" by raising interest rates before the end of the year, Issa added.

The U.S. dollar .DXY rose against a basket of major currencies as U.S. factories ramped up activity in September.

The Canadian dollar CAD=D4 ended at C$1.3110 to the greenback, or 76.28 U.S. cents, slightly stronger than Friday's close of C$1.3117, or 76.24 U.S. cents.

The currency's strongest level of the session was C$1.3068, while its weakest was C$1.3144.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015.   REUTERS/Mark Blinch