TORONTO, Nov 27 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Thursday as oil prices rose and data showed that Canada's current account deficit narrowed more than expected in the third quarter.
The loonie was trading 0.1% higher at 1.4030 per U.S. dollar, or 71.28 U.S. cents, in restrained trading due to the U.S. Thanksgiving holiday. The currency touched its strongest intraday level since November 19 at 1.4029, after expectations rose in recent days that the Federal Reserve will cut interest rates in December.
Canada's current account deficit narrowed to C$9.68 billion ($6.90 billion) in the third quarter from a downwardly revised C$21.56 billion deficit in the second quarter. Analysts had forecast a deficit of C$16.50 billion.
"The current account improved from a tough second quarter, but the broadest measure of trade will continue to be under pressure while trade uncertainty stays elevated - especially given that Canada-U.S. negotiations remain on hold," Shelly Kaushik, a senior economist at BMO Capital Markets, said in a note.
On Wednesday, Canadian Prime Minister Mark Carney said that talks between the U.S. and Canada on a trade deal in key sectors had not yet restarted.
Canadian GDP data, due on Friday, could help guide expectations for additional Bank of Canada interest rate cuts. Analysts forecast the economy grew at an annualized rate of 0.5% in the third quarter, which would be an outcome that narrowly avoids a second straight quarterly contraction.
The price of oil , one of Canada's major exports, was trading 0.3% higher at $58.82 a barrel as the market weighed talks to end the war in Ukraine against the impact of Western sanctions on Russian supply.
Canadian bond yields moved lower across the curve. The 10-year was down nearly one basis point at 3.131%, after earlier touching its lowest level since November 7 at 3.124%.
Reporting by Fergal Smith; Editing by Leslie Adler
