TORONTO, June 23 (Reuters) - The Canadian dollar rose against the U.S. currency on Tuesday morning as a rising oil price lent support to the commodity-linked currency.
The price of oil, a key Canadian export, rose above $68 a barrel, reversing earlier losses, [ID:nSIN510304], while its firmer tone helped Toronto’s main stock index notch an opening gain after dropping more than 4 percent on Monday.
At 9:32 a.m. (1332 GMT), the Canadian currency was at C$1.1493 to the U.S. dollar, or 87.01 U.S. cents, up from C$1.1526 to the U.S. dollar, or 86.76 U.S. cents, at Monday’s close.
The Canadian dollar fell to its lowest level against the greenback in nearly five weeks on Monday.
“Yesterday’s story was a combination of Canadian equities getting hammered on the back of weaker commodities. So the fact that those are recovering a little bit today we’re seeing a little bit of a retracement,” said J.P. Blais, vice president foreign exchange products, at BMO Capital Markets.
With a dearth of economic data in Canada, focus turned to the two-day U.S. Federal Reserve policy meeting that began on Tuesday.
The market will be watching to see the U.S. central bank’s economic outlook and for further details on its debt buying program.
Canadian bond prices eased after racking up big gains in the previous session as risk appetite reappeared on Tuesday with bargain-hunting on stock markets.
Toronto’s main stock index opened moderately higher [ID:nTOR004686], while U.S. stocks edged higher at the open. [ID:nN23544849]
The benchmark two-year government bond fell 3 Canadian cents to C$100.00 to yield 1.250 percent, while the 10-year bond slipped 10 Canadian cents to C$102.55 to yield 3.444 percent.
The 30-year bond dipped 15 Canadian cents to C$118.35 to yield 3.914 percent. The comparable U.S. issue yielded 4.442 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)