By Chris Fournier Oct. 30 (Bloomberg) -- Canada's currency appreciated for a third day to the strongest in more than a week as stocks worldwide rose and commodity prices increased. The Canadian dollar is poised for its biggest weekly gain since at least 1971, when Bloomberg records begin. Crude oil, which accounts for a tenth of the nation's export revenue, exceeded $70 a barrel. ``We've seen asset markets rebounding, equity markets moving higher and volatility easing back,'' said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, France's biggest bank. ``The Canadian dollar is likely to gain a fair bit of ground in the coming days.'' The loonie, as the Canadian currency is known because of the aquatic bird on the one-dollar coin, climbed as much as 2.8 percent to C$1.1902 per U.S. dollar, from C$1.2233 yesterday. It traded at C$1.2057 at 9:49 a.m. in Toronto. Canada's dollar has strengthened 5.8 percent since Oct. 24, after four weekly declines. One Canadian dollar buys 82.83 U.S. cents. The MSCI World Index, a gauge of 23 developed nations, added 2.5 percent to 947.08, advancing for a third day. Europe's Dow Jones Stoxx 600 Index increased 2.6 percent. Currency Will Strengthen Stannard predicts the loonie will strengthen to about C$1.17 or C$1.18 heading into next week, though he expects the currency will weaken back to C$1.30 over the course of the year and into the first quarter of 2009. Demand for natural resources from the U.S. and emerging economies such as India and China last year drove the loonie to parity with the U.S. dollar for the first time in three decades. Canada, the world's eighth-biggest economy, is the second-biggest exporter of natural gas and sits on the largest pool of oil reserves outside the Middle East. Crude oil for December delivery climbed as much as $3.10, or 4.6 percent, to $70.60 a barrel. It reached a record $147.27 on July 11. The Canadian dollar has declined 16 percent since then and has lost 12 percent since Sept. 30, headed for the worst month since 1950, according to Bloomberg and Bank of Canada data. ``Bouncing commodity prices'' are responsible for today's Canadian-dollar rally, said Richard Briggs, a Montreal-based vice president at MF Global Canada & Co., a unit of MF Global Ltd., the world's largest broker of exchange-traded futures and options. ``Everything was oversold. When everyone is on the same side of the boat, they tend to run to the other side with the first wave.'' Gold increased $5.70 an ounce to $760.60 an ounce. Silver rose 2.7 percent. The 10-year note's yield rose 2 basis points, or 0.02 percentage point, to 3.76 percent. It touched 3.78 percent, the highest since Oct. 16. The price of the 4.25 percent security maturing in June 2018 fell 17 cents to C$103.89. The yield on the two-year government bond added 2 basis points to 2.09 percent. The price of the 2.75 percent security due in December 2010 fell 5 cents to C$101.35. The 10-year bond yielded 167 basis points more than the two- year security, the widest spread since August 2004. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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