(C) Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto
TORONTO (Reuters) – The Canadian dollar edged higher against its U.S. counterpart on Tuesday, adding to the previous day’s rally as oil prices rose and domestic data showed faster-than-expected economic growth.
Canada’s economy grew at an annualized rate of 9.6% in the fourth quarter, beating analyst expectations of 7.5%, Statistics Canada data showed on Tuesday, with GDP expected to climb 0.5% in January.
The price of oil, one of Canada’s major exports, rose before this week’s OPEC+ meeting where producers are expected to ease supply curbs as economies start to slowly recover from the coronavirus crisis.
U.S. crude prices rose 0.9% to $61.18 a barrel, while the Canadian dollar was trading 0.1% higher at 1.2638 to the greenback, or 79.13 U.S. cents.
On Monday, the loonie strengthened 0.7%, its biggest gain in nearly six weeks, as pressure on stocks due to the recent jump in bond yields faded.
Global stock markets paused on Tuesday as investors sought to guess the bond market’s next move.
Canadian government bond yields were higher across a steeper curve, with the 10-year up 3.5 basis points at 1.377%. On Friday, it touched its highest intraday since January last year at 1.501%.
Canadian dollar adds to Monday’s rally as economy grows
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