The Canadian dollar rose to its highest levels in more than two weeks against its U.S. counterpart on Monday as oil prices rallied after Saudi Arabia and Russia proposed extending a current agreement to cut oil production.
Oil prices rallied after Saudi Arabia and Russia said on Monday that they believe a deal to cut oil production should be extended for a further nine months until March 2018 in a bid to slash a global supply glut.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
The bounce in oil prices offset concerns over rising geopolitical tensions after North Korea confirmed that it had carried out a mid-to-long range missile test on Sunday.
Brent crude surged 3.13% to $52.43 per barrel, while U.S. crude gained 3.47% to $49.49.
USD/CAD was down 0.63% at 1.3630 by 09.30 ET, having touch session lows of 1.3602, the weakest level since April 27.
In the U.S., data on Monday showed that factory activity New York state weakened this month, as companies reported a drop in new orders.
The Empire State manufacturing index has fell to minus 1, from 5.2 in April, compared to economists’ expectations of a rise to 7.0. it was the first negative reading since October 2016.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.33% at 98.72.