TORONTO- The commodity-linked Canadian dollar strengthened to a two-month high against its U.S. counterpart on Tuesday as steps to reopen the world economy boosted investor sentiment.
World shares forged ahead and commodity markets drove higher as investors disregarded Sino-U.S. tensions to focus on the easing of lockdowns and a potential coronavirus vaccine.
The price of oil, one of Canada's major exports, was supported by growing confidence that producers are following through on commitments to cut supplies and rising fuel demand as coronavirus lockdowns ease. U.S. crude prices were up 4% at $34.58 a barrel.
At 9:19 a.m. (1319 GMT), the Canadian dollar was trading 1.1% higher at 1.3826 to the greenback, or 72.33 U.S. cents. The currency touched its strongest intraday level since March 16 at 1.3817.
Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins are due to appear before the Standing Senate Committee on National Finance at 5 p.m. (2100 GMT).
On Monday, Poloz, whose successor Tiff Macklem takes over on June 3, said the central bank's dominant concern has been with the possibility that deflation could emerge and that its policy framework gives it flexibility in the time it takes to get inflation back to target.
Canadian government bond yields were higher across a steeper yield curve in sympathy with U.S. Treasuries. The 10-year yield rose 6 basis points to 0.549%.
(Reporting by Fergal Smith; Editing by Bernadette Baum) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;))
