The loonie rose 0.09 of a cent to 94.4 cents US.
The reading is about one US cent higher than late last week when the currency matched lows from the summer of 2010 in the wake of the Bank of Canada's latest interest rate announcement, which left traders with the impression that rate hikes likely won't happen any time soon.
Analysts caution that any gains in the loonie will be limited by the bank's dovish statement and also gains in the U.S. dollar as the Federal Reserve moves to start tapering its US$85 billion of monthly bond purchases.
But there are reasons for optimism, at least in the short term.
"We see several developments as supporting the near-term Canadian dollar strength," said Camilla Sutton, chief currency strategist at Scotia Capital.
"The first is a shift higher in global, and in particular, U.S. growth. (The dollar) is a pro-cyclical currency, typically doing well in times of accelerating global growth and depreciating when global growth shifts lower. (Also), oil prices and oil spreads between world benchmarks and Canadian-priced oil have improved and domestic data has been reasonably strong, supporting the view that what is good for the U.S. economy is ultimately good for Canada."
On the commodity markets, January crude slipped $1.07 to US$97.44 a barrel even as the U.S. Energy Information Administration said that crude supplies fell by a much more than expected 10.6 million barrels last week. Analysts had expected a decline of 2.8 million barrels.
March copper was three cents higher at US$3.29 a pound while February bullion dipped $3.90 to US$1,257.20 an ounce.Suggest a correction