The Canadian dollar pushed higher against its U.S counterpart on Monday as prices for oil, a major Canadian export, rebounded after suffering their third straight weekly loss last week.
Oil prices rebounded on Monday as investors returned to the market to seek cheap valuations in wake of recent losses.
Prices have been hard hit in recent weeks by fears that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market.
On Friday the loonie hit its highest level against the greenback since late May after an unexpectedly strong Canadian jobs report underlined the view that the Bank of Canada could raise interest rates.
The economy added 54,500 jobs statistics Canada reported, easily beating economists’ expectations for jobs growth of 11,000.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 97.12, having retreated from Friday’s two-week highs of 97.47.
Investors were turning their attention to Wednesday’s Federal Reserve policy meeting, where the central bank is widely expected to deliver its second rate hike so far this year.
With a rate hike largely priced in investors will be watching for indications on the pace of further tightening in the second half of the year and further details on the Fed’s plans for reducing its balance sheet.