Photo: The Canadian Press

TORONTO — Strength in the commodities sectors lifted Canada’s main stock index to its best close and propelled the loonie to its highest level in six years.

The key energy and materials sectors advanced in trading Monday, helping the Canadian dollar to climb to its highest level since May 2015.

The Canadian dollar traded for 82.77 cents US compared with 82.58 cents US on Friday.

“It’s really being fully driven by the broad rally in commodities that we have seen,” said Angelo Kourkafas, an investment strategist at Edward Jones.

“There is a very close correlation between oil and the loonie and right now that’s what’s driving it higher.”

Kourkafas expects the dollar will rise to about 84 cents US in the next few months.

“But to see really much higher Canadian dollar levels, that would require probably oil to trade near the $80s range, which is not our base-case scenario.”

Energy gained 2.9% as crude oil prices consolidated above US$66 a barrel over the prospects of rising demand in the United States, where COVID-19 vaccinations are prompting a rebound in travel ahead of the busy summer season.

“I think the markets are extrapolating the same thing globally but with a lag,” he said. “What we are experiencing now on the U.S., it’s going to more of a second half-year story everywhere else.”

The June crude contract was up 90 cents at US$66.27 per barrel and the June natural gas contract was up 14.8 cents at US$3.11 per mmBTU.

The S&P/TSX composite index gained 107.96 points to a record close of 19,474.65 that is about 70 points below its all-time high.

In New York, the Dow Jones industrial average was down 54.34 points at 34,327.79. The S&P 500 index was down 10.56 points at 4,163.29, while the Nasdaq composite was down 50.93 points at 13,379.05.