BLBG: Canada’s Dollar Gains as U.S. Currency Loses Haven Appeal
By Chris Fournier
Dec. 8 (Bloomberg) -- Canada’s currency rose as President- elect Barack Obama’s pledge to spend the most on infrastructure since the 1950s reduced the U.S. currency’s haven appeal.
“It’s a risk appetite move,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “Across the currency board, we’re seeing the U.S. dollar weaker.”
The Canadian dollar appreciated as much as 2 percent to C$1.2457 per U.S. dollar, from C$1.2702 on Dec. 5, the biggest intraday gain since Nov. 24. The currency traded at C$1.2525 at 7:57 a.m. in Toronto. One Canadian dollar buys 79.91 U.S. cents.
The U.S. dollar weakened against all of the 16 most actively traded currencies except Japan’s yen and Brazil’s real.
In remarks on NBC’s “Meet the Press” program yesterday, Obama reiterated a commitment to the biggest investments in U.S. infrastructure since President Dwight D. Eisenhower created the interstate highway system a half-century ago.
“The market is heavily focused on this news from Barack Obama,” said Gallo, who predicts the Canadian dollar may strengthen to C$1.20 by year-end.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
