TORONTO (Reuters) - The Canadian dollar strengthened to a near three-week high against the greenback on Friday as U.S. stocks rose after the Thanksgiving holiday and Bank of Canada Governor Tiff Macklem welcomed recent news on COVID-19 vaccine progress.
The loonie was trading 0.2% higher at 1.2983 to the greenback, or 77.02 U.S. cents, having touched its strongest intraday level since Nov. 9 at 1.2976.
The currency was on track to gain 0.9% for the week as the U.S. dollar broadly declined.
Canada's economy could rebound faster than expected if consumer spending jumps in the wake of a successful coronavirus vaccination effort, Macklem said on Thursday.
However, if the economy weakens amid a second wave of infections, Macklem indicated the central bank could if necessary cut already record low interest rates. The Bank of Canada's next policy decision is due on December 9.
Wall Street's main indexes have gained more than 10% this month as investors bet on a sooner-than-expected COVID-19 vaccine and calmer global trade under President-elect Joe Biden, setting the S&P 500 for its best November ever.
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.
U.S. crude oil futures were down nearly 1% at $45.26 a barrel on Friday but remained on course for a fourth straight week of gains ahead of an OPEC+ meeting early next week.
Canadian government bond yields were mixed across the curve on Friday, with the 10-year yield nearly unchanged at 0.688%.