Canadian dollar posts biggest gain in eight weeks as stocks rally

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. The Canadian dollar strengthened against the U.S. dollar on Friday after Canadian CPI data showed an increase in core inflation. REUTERS/Mark Blinch

TORONTO (Reuters) - The Canadian dollar strengthened against all the other G10 currencies on Monday as investor sentiment perked up ahead of the U.S. presidential election and oil prices rebounded.

The Canadian dollar CAD= was trading 0.7% higher at 1.3230 to the greenback, or 75.59 U.S. cents, which was the best performance among G10 currencies. It was the loonie's largest advance since Sept. 9, clawing back some of last week's 1.5% decline.

Wall Street’s major indexes gained ground after suffering their worst week since March, as investors geared up for an event-packed week centered around Tuesday’s election.

The loonie got a boost from the “slight upturn in risk appetite” as well as higher commodity prices, said Hendrix Vachon, a senior economist at Desjardins.

Canada is a major producer of commodities, including oil. U.S. crude oil futures CLc1 settled 2.9% higher at $36.81 a barrel after data showed China's factory activity rose to its highest in nearly a decade and U.S. manufacturing activity accelerated more than expected.

In Canada, data showed that manufacturing activity expanded for the fourth straight month in October as the sector continued to recover from the coronavirus crisis.

Canada’s trade report for September is due on Wednesday, while the October jobs report is due on Friday.

Canadian government bond yields were mixed across a flatter curve on Monday, with the 10-year CA10YT=RR down 3.7 basis points at 0.630%.

Reporting by Fergal Smith; Editing by Bernadette Baum and Sonya Hepinstall