Canada’s currency gained as speculation that governments will do more to spur lending prompted investors to seek higher-yielding assets including equities and commodity-linked currencies. “Across the board U.S. dollar weakness and an associated decline in market risk aversion” boosted the Canadian dollar, Adam Cole, global head of currency strategy at Royal Bank of Canada in London, wrote in a note today. The Canadian dollar rose 0.7 percent to C$1.2351 per U.S. dollar at 9 a.m. in Toronto, from C$1.2438 yesterday. The loonie, as Canada’s dollar is known, is headed for a decline of 1.4 percent this week. One Canadian dollar buys 80.97 U.S. cents. The U.S. Congress is set to give final approval today on its economic stimulus package. The administration of President Barack Obama wants banks to offer loans with easier terms to more than 2 million borrowers in danger of defaulting on their mortgages. The U.S. dollar fell against 10 of the 16 most actively traded currencies, including the New Zealand Dollar and the Australian dollar, which along with Canada’s currency tend to mirror movements in commodity prices. Crude oil for March delivery climbed 39 cents, or 1.2 percent, to $34.37 a barrel on the New York Mercantile Exchange. The MSCI World, a benchmark index for 23 developed markets, advanced 0.8 percent, the first advance in four sessions. Canada’s currency will depreciate to C$1.26 against the U.S. dollar by the end of March before rebounding to C$1.20 by year- end, according to the median forecast in a Bloomberg News survey of 44 economists.

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