BLBG: Canada's Dollar Gains to the Highest in 3 Weeks on Commodities
By Chris Fournier
Nov. 4 (Bloomberg) -- Canada's currency rose to the highest in almost three weeks as commodities including oil gained and global stocks advanced, signaling an increase in risk appetite.
The Canadian dollar has increased 9.6 percent since Oct. 24, paring its decline this quarter to 8.8 percent.
``Investors are turning away from risk aversion,'' said Jacqui Douglas, a currency strategist at TD Securities in Toronto. ``Markets seem to be willing to move into riskier currencies,'' including the Canadian dollar.
Canada's currency, dubbed the loonie for the aquatic bird on the one-dollar coin, climbed as much as 1.6 percent to C$1.1628 per U.S. dollar, from C$1.1814 yesterday. It reached C$1.1538 on Oct. 15. Canada's dollar traded at C$1.1656 at 8:53 a.m. in Toronto. One Canadian dollar buys 85.78 U.S. cents.
Douglas predicts the loonie will weaken to C$1.25 by year- end.
Crude oil, which accounts for a tenth of Canada's export revenue, climbed as much as $1.65, or 2.6 percent, to $65.56 a barrel. The MSCI World Index, a gauge of stocks in 23 developed nations, advanced 1.6 percent to 976.64, advancing for a sixth day.
The Reserve Bank of Australia cut borrowing costs 0.75 percentage point, more than economists forecast, sparking speculation the Bank of England and European Central Bank will reduce interest rates more than expected when they meet on Nov. 6, Douglas said.
``The markets are more optimistic that central banks will do whatever they have to do,'' she said.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
