TORONTO (Reuters) - The Canadian dollar steadied on Friday against its U.S. counterpart but was on track to advance 1.5 percent for the week as stocks rose and the United States weighed the prospect of rejoining the Trans Pacific Partnership (TPP) trade pact.
U.S. stocks rose after a trio of big banks reported strong quarterly results, while geopolitical risks and concerns over trade war eased.
Canada’s commodity-linked currency tends to track movement in stocks due to the signals that market may send about prospects for economic growth.
U.S. President Donald Trump said the United States would only join the TPP, a multinational trade deal his administration walked away from last year, if it offered “substantially better” terms than those provided under previous negotiations.
Canada was one of eleven countries that signed the agreement last month.
U.S. crude CLc1 prices were up 0.3 percent at $67.29 a barrel. Oil, one of Canada’s major exports, has been boosted this week by Trump’s comments about possible military action in Syria and reports of dwindling global oil stocks.
At 9:37 a.m. EDT (1337 GMT), the Canadian dollar CAD=D4 was little changed at C$1.2593 to the greenback, or 79.41 U.S. cents. The currency traded in a range of C$1.2553 to C$1.2595.
On Wednesday, the loonie touched its strongest in more than seven weeks at C$1.2545.
In addition to higher oil prices, the currency has benefited recently from investor optimism over a deal to revamp the North American Free Trade Agreement, stronger-than-expected domestic jobs data and an upbeat business survey from the Bank of Canada.
The central bank is likely to raise interest rates twice more this year as the economy regains momentum in the current quarter but will hold them steady at its April 18 meeting, according to a Reuters poll of economists.
Resales of Canadian homes rose 1.3 percent in March from February as gains in Ottawa and Montreal helped offset declines elsewhere, but recent mortgage rule changes have left both buyers and sellers uncertain, the Canadian Real Estate Association said.
Canadian government bond prices were lower across much of the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR dipped 0.5 Canadian cent to yield 1.899 percent and the 10-year CA10YT=RR declined 1 Canadian cent to yield 2.286 percent.
The 10-year yield touched its highest intraday since March 21 at 2.288 percent.
Reporting by Fergal Smith; Editing by Bernadette Baum