The Canadian dollar rose to the highest level in a week as U.S. Senate leaders reached a bipartisan deal to end a government shutdown and avoid default, fueling demand for riskier assets.
The currency gained against the majority of its 16 most-traded peers as Republicans from the House of Representatives and the Senate signaled they would let the bill pass without the provisions to defund President Barack Obama’s 2010 health care plan, which they had demanded when the standoff began four weeks ago. Crude oil, Canada’s largest export, rose and stocks gained.
“It’s good for the U.S. economy, it’s good for Canada so it should be good for the currency and the Canadian dollar does stand to benefit disproportionately with the U.S. coming back to business in terms of the government,” said David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD Securities unit, by phone from Toronto. “The price of oil is stronger as well, so it’s that commodity story, it’s risk assets, it’s taking out one of the major sources of uncertainty.”
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