(Reuters) - The Canadian dollar edged higher against a broadly stronger U.S. dollar on Monday, supported by a bounce in the price of oil, but remained close to the multi-month low touched on Friday.
The price of oil, one of Canada’s major exports, rose by about 1 percent on Monday, set for its largest one-day increase in about a month after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day.
Saudi Arabia, the world’s largest oil exporter, said on Sunday it would cut its shipments by half a million barrels per day in December due to seasonal lower demand.
At 09:05 a.m. (1405 GMT), the Canadian dollar CAD=D4 was trading up 0.05 percent against the greenback, at 1.3204 or 75.73 U.S. cents. On Friday, the currency hit its weakest level since July 20 at 1.3233.
The U.S. dollar rallied to a more than 16-month high on Monday as investors positioned for a Federal Reserve interest rate rise next month and concern about political risks in Europe put pressure on the euro and the pound.
The euro was 0.65 percent lower against the loonie EURCAD=, while sterling was 0.48 percent lower GBPCAD=.
“Typically in a strong U.S. dollar environment, the Canadian dollar gains on the crosses,” Marc Chandler, chief market strategist at Bannockburn Global Forex LLC, said in a note.
Canadian bond markets were closed on Monday to mark Remembrance Day.
Reporting by Saqib Iqbal Ahmed; Editing by Susan Thomas