TORONTO (Reuters) – The Canadian dollar strengthened to a more-than two-week high against the greenback on Thursday as oil prices rose, while Bank of Canada Governor Tiff Macklem left negative interest rates on the table if the coronavirus crisis were to worsen.
The BoC is not actively discussing negative interest rates but they are a tool the bank could use in case it needs to do more to tackle economic challenges caused by the coronavirus outbreak, Governor Tiff Macklem said. “Never say never,” he said.
The price of oil, one of Canada’s major exports, was supported by output shutdowns in the U.S. Gulf of Mexico and the prospect of more supply losses in Norway, as well as by hopes for some U.S. coronavirus relief aid. U.S. crude <CLc1> prices were up 2.8% at $41.06 a barrel.
The Canadian dollar <CAD=> was trading 0.1% higher at 1.3243 to the greenback, or 75.51 U.S. cents. The currency touched its strongest intraday level since Sept. 21 at 1.3229.
Canadian housing starts fell by more than expected in September, tumbling about 20% to 208,980 units from a revised 261,547 units in August, data from the Canadian Mortgage and Housing Corporation showed.
Canadian government bond yields edged lower across the curve in sympathy with U.S. Treasuries. The 10-year <CA10YT=RR> fell one basis point to 0.614%, pulling back from an earlier five-week high at 0.639%.
Canada’s jobs report for September is due on Friday, which can help guide expectations for the strength of economic recovery.
(Reporting by Fergal Smith; Editing by Steve Orlofsky)