Canadian dollar strengthens to nearly three-week high as greenback falls

Tue May 16, 2017 5:07pm EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened on Tuesday to a nearly three-week high against its U.S. counterpart as the greenback lost ground against a basket of major currencies, offsetting a pullback in oil prices.

The weakening of the U.S. dollar .DXY came as U.S. officials said President Donald Trump discussed intelligence about Islamic State with Russian Foreign Minister Sergei Lavrov and Russian Ambassador Sergei Kislyak at talks last Wednesday in the Oval Office.

"His entire agenda is in danger at this point. Traders are piling out of the U.S. dollar into commodity-linked currencies, into the euro, into the yen," said Karl Schamotta, director global markets strategy at Cambridge Global Payments.

At 4 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading at C$1.3587 to the greenback, or 73.60 U.S. cents, up 0.3 percent, according to Reuters data.

The currency's weakest level of the session was C$1.3659, while it touched its strongest since April 27 at C$1.3575.

U.S. Senator Charles Grassley said that he believes the Trump administration will likely pursue a trilateral trade deal with Canada and Mexico as it renegotiates the North American Free Trade Agreement.

An uncertain trade outlook with the United States had helped pressure the Canadian dollar to a 14-month low at C$1.3793 earlier this month.

U.S. crude oil futures CLc1 settled 19 cents lower at $48.66 a barrel, paring some recent gains, as the market awaited weekly U.S. inventory figures and as Kuwait and other OPEC members joined top producers Saudi Arabia and Russia in support of prolonging supply cuts through March 2018.   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