June 13, 2019 / 2:14 PM / 3 months ago

Loonie breaks this week's losing run as oil rallies

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch/File Photo

TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, after a three-day run of declines as oil prices rallied and domestic household indebtedness edged lower.

At 9:38 a.m. (1338 GMT), the Canadian dollar was trading 0.2% higher at 1.3322 to the greenback, or 75.06 U.S. cents. The currency, which has declined 0.5% this week, traded in a range of 1.3300 to 1.3342.

The price of oil, one of Canada’s major exports, rose after a suspected attack on two tankers in the Gulf of Oman near Iran and the Strait of Hormuz, through which a fifth of global oil passes. U.S. crude oil futures were up 3.3% at $52.84 a barrel.

Canadian household debt as a share of income, a measure closely watched by policymakers, slipped to 173.0% in the first quarter from 173.7% in the fourth quarter but is still near record levels, Statistics Canada.

Meanwhile, a survey from Export Development Canada, completed in March and April, showed that Canadian exporters’ confidence fell to a seven-year low amid the disruption caused by trade wars and the imposition of U.S. tariffs.

The Bank of Canada has repeatedly identified the U.S.-China trade war as one of the main risks facing the economy.

Canadian government bond prices were higher across a steeper yield curve in sympathy with U.S. Treasuries. The two-year rose 2.5 Canadian cents to yield 1.435% and the 10-year was up 5 Canadian cents to yield 1.491%.

On Tuesday, the 10-year yield touched its highest intraday in 11 days at 1.543%.

Reporting by Fergal Smith; Editing by Steve Orlofsky

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