Canadian Dollar Rises as Domestic Data Supports Loonie

The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the greenback posted broad-based declines and recent domestic data lent support to the loonie.

The loonie was trading 0.3 per cent higher at 1.4025 per U.S. dollar, or 71.30 U.S. cents, after moving in a range of 1.4015 to 1.4080.

According to Scotiabank strategists Shaun Osborne and Eric Theoret, there is still a case for 'modest fundamental improvement' in the Canadian dollar based on stable front-end spreads and relative data surprises.

The recent data has been positive for Canada's economy, with the country's 2-year yield trading about 136 basis points below the equivalent U.S. rate, narrowing from 145 basis points last week.