(Adds strategist quotes and details throughout, updates prices)
* Canadian dollar rises 0.4% against the greenback
* Loonie touches its strongest since March 9 at 1.3483
* Price of U.S. oil increases 3.9%
* Canada's 10-year yield rises nearly 1 basis
point
By Fergal Smith
TORONTO, June 2 (Reuters) - The Canadian dollar strengthened
to a near three-month high against its U.S. counterpart on
Tuesday as investors bet on global economic recovery and ahead
of an interest rate decision by the Bank of Canada on Wednesday.
The loonie was trading 0.4% higher at 1.3517 to the
greenback, or 73.98 U.S. cents. The currency touched its
strongest intraday level since March 9 at 1.3483.
Gains for the loonie show that "markets are looking toward a
brighter future," said Michael Goshko, corporate risk manager at
Western Union Business Solutions.
Canada runs a current account deficit and is a major
producer of commodities, including oil, so its economy could
particularly benefit from a pickup in the global flow of trade
and capital.
U.S. crude oil futures settled 3.9% higher at $36.81
a barrel on hopes that major crude producers will agree to
extend output cuts and as countries and U.S. states begin to
reopen after coronavirus lockdowns.
The recovery effort bolstered world stocks , winning
out over U.S.-China tensions and the worst civil unrest in the
United States in decades.
"As equities continue to surge higher, the U.S. dollar
continues to decline against most currencies, unwinding the safe
haven trade," Goshko said.
The U.S. dollar extended its decline since March
against a basket of major currencies , while
Canada's 10-year was up nearly 1 basis point at
0.542%.
Economists say that Canada's economy likely bottomed out in
April when non-essential businesses across the country were
closed to help contain the coronavirus pandemic. Attention has
been turning to how fast the economy can recover and the
potential level of fiscal and monetary policy support.
The Bank of Canada is expected to hold interest rates at a
record low of 0.25% on Wednesday, when Tiff Macklem will begin
his seven-year term as governor of the central bank.
(Reporting by Fergal Smith; editing by Jonathan Oatis and
Cynthia Osterman)
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