TORONTO – The Canadian dollar bounded ahead for a second day Tuesday as oil prices continued to rally on hopes that the worst of the plunge in oil prices may be over.

The loonie jumped 1.16 cents to 80.67 cents US on top of a rise of about eight-tenths of a cent Monday.

Oil prices have surged 19 per cent over the last four sessions amid news of a big drop in U.S. drilling rig counts. On Tuesday, the March contract in New York was up $3.48 to US$53.05 a barrel, but prices are still less than half of the most recent highs reached last June because of a huge oversupply of crude on world markets.

Oil companies have responded by slashing capital spending plans for drilling and other projects and in some cases cutting production.

“Falling rig counts, stimulative global central bank policy and broad short covering are fuelling a recovery in oil prices,” observed Camilla Sutton, chief FX strategist, managing director, Scotiabank Global Banking and Markets.

The big drop in oil prices has helped send the loonie down about six cents just since the start of 2015.

Elsewhere on commodity markets, the March copper contract jumped nine cents to US$2.58 a pound.

The April gold bullion contract lost $16.60 to US$1,260.30 an ounce.

On the economic front, U.S. home values rose at a modest pace in December as real estate data provider CoreLogic said prices were up five per cent from 12 months earlier. That is less than the 5.5 per cent price gain recorded in November and much lower than the double-digit gains of last year.

Orders to U.S. factories dropped for a fifth consecutive month in December. Also, a key category that signals business investment plans fell for a fourth straight month. Factory orders declined 3.4 per cent in December after a 1.7 per cent drop in November. Demand in a key category that serves as a proxy for business investment plans edged down 0.1 per cent.

On Friday, traders will take in the major report of the week — the U.S. government’s employment report for January.

Canadian job numbers for January also come out Friday.