Canadian dollar posts 11-day high as investor sentiment improves
Summary
Canadian dollar gains 0.6% against the greenback
Touches an 11-day high at 1.4276
Home sales tumble 9.8% in February
Bond yields ease across the curve
TORONTO, March 17 (Reuters) - The Canadian dollar strengthened to an 11-day high against its U.S. counterpart on Monday as equity markets rallied and investors cheered China's plan to stimulate consumption.
The loonie was trading 0.6% higher at 1.4280 per U.S. dollar, or 70.03 U.S. cents, after touching its strongest intraday level since March 6 at 1.4276.
"A strong bounce in equities has boosted risk sentiment today, which has weakened the USD across the board," said George Davis, chief technical strategist at RBC Capital Markets.
"There hasn't been much news on the tariff front today, which is also helping sentiment."
Wall Street rallied as some investors took advantage of the recent selloff to buy stocks at cheaper prices.
China's State Council unveiled on Sunday what it called a "special action plan" to boost domestic consumption.
"The market has been waiting for a deal for Chinese consumer stimulus for six months," Adam Button, chief currency analyst at ForexLive. "There are some seeds of global growth being planted and the market is feeling a bit better about tariffs."
U.S. President Donald Trump's tariff hikes will drag down growth in Canada, Mexico and the United States while driving up inflation, the OECD forecast.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to prospects for the global economy.
The price of oil settled 0.6% higher at $67.58 a barrel after the United States vowed to keep attacking Yemen's Houthis until the Iran-aligned group ends its assaults on shipping.
Canadian home sales tumbled 9.8% in February, the biggest decline in nearly three years, as the onset of a trade war kept buyers on the sidelines.
Canadian bond yields moved lower across the curve. The 10-year was down 4.7 basis points at 3.019%.
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