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 1.4 percent to C$1.2030 per U.S. dollar at 4:01 p.m. in Toronto. It touched C$1.1991, the strongest level since April 16. One Canadian dollar buys 83.12 U.S. cents. The MSCI World Index, a gauge of equities in 23 developed nations, advanced 2.2 percent. Crude oil for June delivery rose as much as $1.50 to $51.42 a barrel in New York. 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. “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. Commodity Currencies 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. Osborne wrote in a separate note that the loonie could appreciate to about C$1.04 in the next six to nine months if it can break through C$1.1764, a so-called key technical level. The currency is poised for its fifth weekly gain, the longest winning streak since November 2007. 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. Canada’s dollar briefly pared gains and the yield on the government bonds rose after the Federal Reserve refrained from increasing purchases of Treasuries and mortgage securities, signaling the worst of the recession may be over. “Yields initially picked up but will likely fade,” said Sebastien Galy, a currency strategist at BNP Paribas Securities SA in New York. “The U.S. dollar was up initially against the Canadian dollar, but is turning in line with good risk appetite.” The yield on the 10-year government bond rose three basis point, or 0.03 percentage point, to 3.08 percent, the highest since March 2. The price of the 3.75 percent security due in June 2019 dropped 28 cents to C$105.74. The two-year note yielded 0.99 percent. The 10-year bond yielded 209 basis points more than the two-year security, bringing the so-called yield curve to the steepest since August 2002.

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