Loonie soars as interest rate hike fears weaken U.S. dollar

Higher oil prices and a weak U.S. dollar helped drive up the loonie as North American stock markets racked up some small gains.

The Canadian dollar added 0.86 of a cent at 77.84 cents U.S., as the greenback tumbled amid diminished hopes that the U.S. Federal Reserve will hike interest rates later this month.

In Toronto, the S&P/TSX composite index was 17.29 points higher at 14,812.99, as the gold, materials and metals sectors registered gains.

On Wall Street, the Dow Jones industrial average climbed 46.16 points at 18,538.12, while the broader S&P 500 jumped 6.5 points to 2,186.48. The Nasdaq composite set an all-time record after rising 26.01 points to 5,275.91.

Meanwhile in commodities, the October crude oil contract gained 39 cents at $44.83 (U.S.) per barrel while the December gold contract headed up $27.30 to $1,354 (U.S.) an ounce.

October natural gas contract dipped 8 cents to $2.72 (U.S.) per mmBTU, as December copper contracts were up a penny at $2.09 (U.S.) per pound.