Canada's dollar rises against U.S. counterpart as oil prices rise


Canadian dollar rises 0.2% against the greenback Canada posts a trade surplus of C $3.2 billion in June Price of U.S. oil increases 0.2% Canadian bond yields rise across the curve TORONTO, Aug 5 - The Canadian dollar strengthened against its U.S. counterpart on Wednesday as oil prices rose and data showed Canada's exports increasing sharply in June with the currency clawing back some of its recent decline over the past week. The loonie was trading 0.2% higher at 1.2514 to the greenback, or 79.91 U.S. cents, after trading in a range of 1.2494 to 1.2547. Since last Thursday, the loonie has weakened 0.6% along with lower prices for oil, one of Canada's major exports. U.S. crude prices were up 0.2% at $68.29 a barrel, but stayed near a two-week low in some countries as concern that rising COVID -19 cases would decrease demand offset the market impact of rising Middle East tensions. Canada had a trade surplus of C $3.2 billion in June, the largest in almost 13 years as exports jumped 8.7% on higher shipments of oil and automobiles, Statistics Canada data indicated. The July jobs report is due Thursday which can help provide clues about the Bank of Canada policy outlook. Analysts expect data to show employment rising by 177,500 as pandemic-related economic restrictions were eased. Analysts have raised their forecasts for the Canadian dollar over the coming year, expecting the Bank of Canada to begin interest rate hikes before the Federal Reserve and the domestic economy to benefit from a high rate of COVID - 19 vaccinations. The yields for U.S. government bonds were higher across the curve, tracking the move in Canadian Treasury bonds and other government bonds. The 10 year century rose 1.3 basis points to 1.148%, after hitting the lowest intraday level for nearly six months on Wednesday at 1.078%.