The Canadian dollar strengthened against its U.S. counterpart on Monday as investor sentiment picked up and attention turned to a Bank of Canada interest rate decision this week, with the currency clawing back some of its recent losses. The loonie was trading 0.6% higher at 1.2764 to the greenback, or 78.35 U.S. cents, its biggest gain since Oct. 8. The currency traded in a range of 1.2754 to 1.2842. On Friday, it touched its weakest intraday level since Sept. 20 at 1.2854. "A somewhat more constructive risk mood is helping lift the CAD," strategists at Scotiabank, including Shaun Osborne, said in a note. The Dow led Wall Street shares higher and the price of oil, one of Canada"s major exports, rose as fear about the Omicron variant eased even as investors braced for another roller-coaster ride like last week"s. read more U.S. crude oil futures settled 4.9% higher at $69.49 a barrel. The Bank of Canada is due to make an interest rate announcement on Wednesday. In October, the central bank signaled it could begin raising interest rates from the current level of 0.25% in April. "This week"s policy decision is not expected to result in any change in policy," the Scotiabank strategists said. "But strong jobs, high inflation, and strong Q3 GDP should drive a positive message from the bank on the economic outlook, even if the Omicron variant clouds near-term risks." Canada"s tight labor market is forcing many companies to offer regular COVID-19 testing over vaccine mandates, while others are reversing previously announced inoculation requirements even as Omicron variant cases rise. read more Canadian government bond yields were higher across a steeper curve, tracking a move in U.S. Treasuries. The 10-year rose 7.9 basis points to 1.516%, after touching on Friday its lowest intraday level since Sept. 27 at 1.425%.