Investing.com - The Canadian dollar was trading close to six-week highs against its U.S. counterpart on Monday as sustained strength in oil prices and a solid domestic employment report supported the loonie.
USD/CAD dipped 0.14% to 1.3271, not far from Friday’s lows of 1.3253, which was the weakest level since October 21.
Data on Friday showing that the Canadian economy added jobs for the fourth straight month in November reinforced expectations that the Bank of Canada will keep interest rates on hold at its meeting this week.
Statistics Canada reported that the economy added 10,700 jobs last month and the unemployment rate fell to a five-month low of 6.8%.
In October, the bank kept rates on hold, but said that it had actively considered cutting for the third time in two years.
Higher oil prices also underpinned demand for the loonie as U.S. crude oil and Brent continued to build on last week’s strong gains on Monday.
The Organization of the Petroleum Exporting Countries last Wednesday reached an agreement on output cuts, which are hoped will reduce massive oversupply, triggering a rally in oil, one of Canada’s major exports.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.16% to 100.60 despite a solid U.S. jobs report on Friday cementing expectations for a rate hike by the Federal Reserve this month.
The U.S. economy added 178,000 jobs in November from the prior month, while the unemployment rate dropped to a nine-year low of 4.6%, the Labor Department said.
According to Investing.com's Fed Rate Monitor Tool, 100% of traders expect the Fed to raise interest rates next week.