BLBG: Canadian Dollar Little Changed as Crude Oil Falls, Stocks Gain
Canada’s currency was little changed against its U.S. counterpart as a second straight day of weaker crude oil tempered the benefit of higher global equities.
The currency’s price movements were muted ahead of government reports in two days’ time that are expected to show Canadian employers eliminated 55,000 jobs in February after record cuts in January and the nation’s trade deficit doubled, according to the median forecasts of economists in two separate Bloomberg News surveys.
“The market is hesitant to take the Canadian dollar too far higher against the U.S. dollar ahead of the Friday data, as it provides a great deal of downside potential,” said Sacha Tihanyi, a Toronto-based currency strategist at Scotia Capital Inc. “I’m keeping an eye on the C$1.27 level to see whether dollar-Canada can break out of the current range on equity strength.”
The loonie, as Canada’s dollar is known, traded at C$1.2768 per U.S. dollar at 9:13 a.m. in Toronto, from C$1.2790 yesterday. It earlier declined as much as 0.7 percent, pushed lower by a report that showed Chinese exports dropped by a record. One Canadian dollar buys 78.32 U.S. cents.
The Canadian currency on March 9 touched C$1.3064, the weakest since Sept. 2, 2004, on concern that the global recession will worsen, crimping demand for commodities, which account for about half of the country’s export revenue.
Crude for April delivery fell as much as $1.02, or 2.2 percent, to $44.69 a barrel on the New York Mercantile Exchange. The MSCI World Index, a gauge of equities in 23 developed countries, climbed 0.8 percent. The Canadian dollar tends to track fluctuations in the prices of stocks and commodities.
Second-Worst
Canada’s currency will strengthen to C$1.22 against the U.S. dollar by year-end, according to the median forecast in a Bloomberg News survey of 41 economists.
The Canadian dollar was the second-worst performer among the 16 most actively traded currencies. Only the U.S. dollar performed worse.
The yield on the two-year government bond was little changed at 0.98 percent. The price of the 2.75 percent security due in December 2010 fell 1 cent to C$103.01.
