Canadian dollar rallies as records fall on Wall Street

(Adds strategist quotes and details throughout; updates prices)
* Canadian dollar rises 0.3% against the greenback
* Loonie touches its weakest intraday since Jan. 18 at
1.2782
* Price of U.S. oil increases 0.4%
* Canadian bond yields rise across the curve

By Fergal Smith
TORONTO, Jan 26 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Tuesday, recovering from an
earlier eight-day low, as corporate earnings bolstered Wall
Street and the greenback broadly declined.
The loonie was trading 0.3% higher at 1.2695 to the
greenback, or 78.77 U.S. cents, having touched its weakest level
since Jan. 18 at 1.2782. The U.S. dollar lost ground
against a basket of major currencies as demand for safe havens
faded.
"It seems to be a fairly broad-based USD move," said Erik
Nelson, a currency strategist at Wells Fargo in New York.
"Buoyant equity and commodity prices, particularly oil
prices, may be helping support some relative CAD outperformance
here as markets await tomorrow's FOMC announcement," Nelson
said.
The S&P 500 notched a record high after a batch of
upbeat earnings updates, including Johnson & Johnson's strong
profit forecast and 3M's quarterly profit beat. The Federal
Reserve kicked off its two-day policy meeting.
Canada will seek exemptions to a U.S. effort to ensure
federal agencies buy American-produced goods, Prime Minister
Justin Trudeau said, as business groups expressed concern about
the potential impact.
Canada sends about 75% of its exports to the United States,
including oil. U.S. crude oil futures settled 0.3% lower
at $52.61 a barrel as global coronavirus cases continued to
rise, but were not far off 11-month highs.
Canada will soon make foreign travel harder in a bid to
clamp down on the coronavirus, Trudeau said without giving
details, prompting major provinces to demand action.

Canadian government bond yields were higher across much of a
steeper curve. The 10-year rose 1.1 basis points to
0.824%.
Canada's GDP data for November is due on Friday which could
offer some clues on the interest rate outlook.

(Reporting by Fergal Smith
Editing by Alistair Bell and Richard Chang)


First Published: 2021-01-26 16:56:32
Updated 2021-01-26 22:25:14


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