BLBG: Canadian Currency Weakens on Speculation Recent Gains Overdone
Canada’s dollar dropped after six straight weeks of gains as crude oil and U.S. stock-index futures fell amid speculation that recent advances may have been overdone.
“The market is due for a bit of a sober second thought,” said Eric Lascelles , Toronto-based chief economics and rates strategist at TD Securities Inc., a unit of Canada’s second- biggest lender. Commodity-linked currencies “went up a long way last week and the market may be having a few second thoughts as to the magnitude of those moves.”
The Canadian currency weakened 0.6 percent to C$1.1564 per U.S. dollar at 8:21 a.m. in Toronto, from C$1.1494 on May 8. The loonie, as Canada’s dollar is known, climbed 3.1 percent last week. One Canadian dollar buys 86.47 U.S. cents.
The greenback rose against all but three of the 16 most traded currencies tracked by Bloomberg. The exceptions were South Korea’s won, Japan’s yen and the Taiwanese dollar.
Crude for June delivery fell as much as 3.2 percent to $56.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Raw materials including oil accounted for 56 percent of Canada’s export revenue last year.
Futures on the Standard & Poor’s 500 Index expiring in June lost 1.5 percent.
