TORONTO, Nov 4 (Reuters) - The Canadian dollar strengthened to a 10-day high against its U.S. counterpart on Monday as oil prices rose and investors reassessed the likely outcome of Tuesday's U.S. presidential and congressional elections.
The loonie was trading 0.4% higher at 1.3895 per U.S. dollar, or 71.97 U.S. cents, after touching its strongest intraday level since Oct. 25 at 1.3876.
"The Canadian dollar is outperforming the (U.S.) dollar in line with a recalibration of odds on a Republican sweep in tomorrow's U.S. election," said Karl Schamotta, chief market strategist at Corpay.
Republican former President Donald Trump, who is in a neck-and-neck race with Democratic Vice President Kamala Harris for the presidency, has proposed sweeping tariffs on imported goods. Canada sends about 75% of its exports to the United States.
Analysts say that tariffs and other proposed measures could boost U.S. inflation, reducing prospects of Federal Reserve interest rate cuts. The U.S. central bank will announce its latest interest rate decision at the end of a two-day policy meeting on Thursday.
The U.S. dollar fell against a basket of major currencies as investors exited from positions that have benefited from speculation Trump is more likely to win the White House.
Speculators have raised their bearish bets on the Canadian dollar to the highest level since mid-August, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Oct. 29, net short positions had increased to 167,499 contracts from 140,631 in the prior week.
The BC Maritime Employers Association said it would lock out workers on Monday at the Port of Vancouver in Western Canada after a negotiating deadline passed, potentially disrupting exports of coal, potash and beef.
The price of oil , one of Canada's major exports, settled 2.85% higher at $71.47 a barrel on a decision by the OPEC+ producers group to delay plans to increase output by a month.
Canadian bond yields were mixed across a flatter curve, with the 10-year down 3.9 basis points at 3.250%.
Reporting by Fergal Smith; Editing by Paul Simao
