3 Min Read
(Adds trader comment, updates prices)
* Canadian dollar ends at C$1.3705, or 72.97 U.S. cents
* Bond prices lower across the maturity curve
By Alastair Sharp
TORONTO, Feb 17 (Reuters) - The Canadian dollar hits its highest level in almost two weeks on Wednesday, helped by a surge in crude oil prices and a stock market rally.
Crue oil rose 7.0 percent after Iran voiced support for a Russia-Saudi-led move to freeze production to deal with a market glut, while Canada's main stock index jumped to its highest since early January.
"Walking in the office at 6:30 this morning it seemed like it was going to be a risk-on kind of day and it certainly turned out to be that way," said David Bradley, a director of foreign exchange trading at Scotiabank.
The Canadian dollar settled at C$1.3705 to the greenback, or 72.97 U.S. cents, much stronger than Tuesday's official close of C$1.3881, or 72.04 U.S. cents.
The currency's strongest level of the session was C$1.3669, its strongest since reaching C$1.3640 on Feb 4.
"As long as we see some stability in financial markets and equities and crude, it makes sense that the Canadian dollar can appreciate a little bit more," Bradley said, adding that if the currency breaches the Feb. 4 level in coming sessions it could push on to around C$1.3425.
It had approached C$1.47 in mid-January, its weakest since 2003.
U.S. crude prices settled were up 5.6 percent to $30.66 a barrel, and later extended gains after data from a U.S. industry group showed a stockpile drop.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 4.5 Canadian cents to yield 0.484 percent and the benchmark 10-year falling 22 Canadian cents to yield 1.179 percent.
Commercial borrowing by small businesses in Canada picked up in December on strength in sectors such as manufacturing and agriculture, data from PayNet showed.
Canadian investors bought a record C$17.45 billion ($12.64 billion) worth of foreign securities in December, Statistics Canada said.
Canadian Finance Minister Bill Morneau on Tuesday effectively conceded the government could not balance the budget as quickly as promised, saying the return to surplus would be achieved over the long term.
Also Tuesday, the British Columbia government projected a budget surplus of C$264 million in fiscal 2016-17 and unveiled measures to boost affordability in Vancouver's hot housing market. (Additional reporting by Fergal Smith)