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  • USD/CAD trims losses after hitting two-year lows at 1.2930.
  • The Canadian dollar appreciates as oil prices surge.
  • The US dollar picks up on higher US Treasury Bond yields.

The greenback is trimming losses on Monday, attempting to return above the 1.3000 psychological level after hitting prices below 1.2950 for the first time in more than two years.

Canadian dollar appreciates as crude prices rally

The commodity-sensitive Canadian dollar has opened the week on a solid pace, fuelled by the increase in crude prices after the drugmaker Pfizer announced that early analyses of its COVID-19 vaccine show a 90% effectiveness.

The price of the West Texas Intermediate barrel (WTI) surged beyond 6% after Pfizer announced the results of its tests, and is nearly 8% up on the day. WTI prices have returned to levels above $40 after having slumped to five-month lows below $34 two weeks ago on concerns about the impact of the second wave of lockdowns on global oil demand.

The greenback, however, has managed to trim losses over the US trading session as optimism about a coronavirus vaccine has also been reflected on higher US Treasury Bond yields. The 10-year Treasury note rallied 13 basis points to 0.95%, with the benchmark rate reaching 0.975% for the first time since March.

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