By Chris Fournier Nov. 27 (Bloomberg) -- Canada’s currency headed for its best performance in four weeks as the U.S. dollar fell against most major currencies and equities advanced today. Canada’s currency, dubbed the loonie for the aquatic bird on the one-dollar coin, has gained 2.8 percent this week as oil climbed back above $50. The U.S. dollar has dropped against all 16 most-actively traded currencies since Nov. 21. “When you pile up the events of the week, it’s easy to see why there’s been some relief in the market,” said Stephen Gallo, head of market analysis in London at Schneider Foreign Exchange. “Risk aversion has generally been light on the ground and the greenback is broadly weaker. That’s an excuse to pick up the Canadian dollar.” The Canadian dollar was little changed at C$1.2322 against its U.S. counterpart at 4:14 p.m. in Toronto, from C$1.2321 yesterday. It gained 5.4 percent in the week ended Oct. 31. One Canadian dollar buys 81.15 U.S. cents. Markets in the U.S. were closed today for the Thanksgiving holiday, making trading today and tomorrow “thin and potentially whippy,” said David Watt, a senior currency strategist at RBC Capital Markets in Toronto. The U.S. Federal Reserve on Nov. 25 committed $800 billion to unfreeze credit for homebuyers, consumers and small businesses. President-elect Barack Obama yesterday picked former Federal Reserve Chairman Paul Volcker to lead an economic advisory board and said he will implement a plan to bolster growth on “day one.” Oil Prices Crude oil accounts for 21 percent of the Bank of Canada’s Commodity Price Index, the largest single component. Oil rose 7.2 percent yesterday and traded at about $54 today. Europe’s Dow Jones Stoxx 600 Index rose 2.4 percent to 203.62, the fourth consecutive gain. The MSCI World Index added 1 percent to 885.05. The gauge of stocks in 23 developed nations advanced for five sessions. A “bearish trend reversal” suggests the Canadian dollar will strengthen against the U.S. dollar to C$1.22 in the short term before weakening again, George Davis, chief technical analyst at RBC Capital Markets in Toronto, wrote in a note to clients today. The “support zone” for currency is C$1.2154 to C$1.2024, he said. Statistics Canada will release data on the nation’s current account, industrial product prices and raw materials prices tomorrow at 8:30 a.m. in Ottawa. The yield on the two-year government bond fell one basis point, or 0.01 percentage point, to 1.72 percent. The price of the 2.75 percent security due in December 2010 rose 1 cent to C$102.02 The 10-year note’s yield fell two basis points to 3.34 percent. The price of the 4.25 percent security maturing in June 2018 added 15 cents to C$107.32. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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