BLBG: Canada's Dollar Strengthens for First Day in Five After Dropping 3 Percent
Canada’s dollar climbed for the first time in five days amid rising equities and raw material prices as the U.S. dollar dropped versus all but two of its 16 most-traded counterparts.
The Canadian currency, nicknamed the loonie, dropped 3 percent during the past four sessions after it reached par with the greenback on Oct. 14 for the first time since April. The Bank of Canada yesterday left its benchmark interest rate at 1 percent and trimmed its growth projections. The central bank issues its latest quarterly forecasts at 10:30 a.m. followed by a news conference by Governor Mark Carney 45 minutes later.
“The Canadian dollar is retracing some of yesterday’s move based on a broadly weaker U.S. dollar,” Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia’s Scotia Capital unit, said via e-mail. “We continue to believe that the broader move in the U.S. dollar is the key driver of the Canadian dollar, and over the next few sessions, the Canadian dollar will be pressured back towards parity.”
The loonie strengthened 0.5 percent C$1.0285 per U.S. dollar at 8:14 a.m. in Toronto, from C$1.0336 yesterday, when it touched C$1.0374, the weakest level since Sept. 23. One Canadian dollar buys 97.23 U.S. cents.
Standard & Poor’s 500 index futures rose 0.5 percent and crude oil futures gained 0.9 percent.
The greenback fell against 14 of its 16 major counterparts before the Federal Reserve releases its Beige Book regional business survey, which may show a slowing recovery in the world’s largest economy.
The U.S. currency is the worst-performing major currency during the past month on speculation that Fed officials will signal further measures are needed as part of the central bank’s quantitative-easing plan to support growth. The currency of Canada, which ships about two-thirds of its exports to the U.S., is the second-worst performer.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
