BLBG: Canadian Dollar Strengthens to Two-Week High as Stocks Advance
Canada’s dollar appreciated, touching the strongest level in two weeks, on speculation that worst of the global recession may be over, bolstering global equities and the price of crude oil.
“Market sentiment seems to have turned on a dime,” said Firas Askari, head currency trader in Toronto at BMO Nesbitt Burns, a unit of Bank of Montreal. “Global equity markets have been staging a bit of a rally. I like the Canadian dollar.”
The Canadian currency climbed 1.2 percent to C$1.2049 per U.S. dollar at 10:12 a.m. in Toronto. It touched C$1.2010, the strongest level since April 16. One Canadian dollar buys 82.99 U.S. cents.
The MSCI World Index, a gauge of equities in 23 developed nations, advanced 1.6 percent. Crude oil for June delivery rose as much as $1.08 to $51 a barrel on the New York Mercantile Exchange.
The greenback declined against all but one of the 16 most active currencies, with the exception being the Japanese yen. Canada’s dollar performed fourth best. The dollars of New Zealand and Australia, which like the loonie tend to track fluctuations in commodity prices, were the top two performers.
Commodity Currencies
“Equities are up and growth and commodity currencies are doing much better, mainly at the expense of the U.S. dollar and the Japanese yen,” Shaun Osborne and Jacqui Douglas, currency strategists in Toronto at TD Securities Inc., wrote in a note to clients.
Canada’s dollar will weaken to C$1.25 by the end of this quarter before rebounding to C$1.19 by the end of March next year, according to the median forecast of 37 economists and analysts surveyed by Bloomberg News.
The loonie lost a record 18 percent last year amid slumping demand for commodities and a global economic slowdown. The nation relies on raw materials such as crude oil, natural gas, copper and lumber for more than half its export revenue.
