Canada’s currency rose for the first time in three days amid advances in global equities and raw materials prices as the U.S. dollar weakened versus all of its 16 most-traded counterparts. The loonie fell against the euro and the yen and is the fourth-worst-performing major currency today after the greenback and Taiwan’s dollar. Speculation about another round of monetary stimulus in the U.S., so-called quantitative easing, suggested it won’t succeed in boosting the economy. Canada’s economic growth is forecast to have accelerated in August. “The overhang of Canada’s close ties to the U.S. is weighing on the Canadian dollar,” Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia’s Scotia Capital unit, wrote via e-mail. “This time, QE is unlikely to launch an upsurge in growth.” The Canadian currency appreciated 0.4 percent to C$1.0242 per U.S. dollar at 10:14 a.m. in Toronto, compared with C$1.0281 yesterday. It is up 0.5 percent this month and up 2.8 percent this year. One Canadian dollar buys 97.642 U.S. cents. The loonie dropped to C$1.4249 against the euro, near the C$1.4352 it touched on Oct. 25, the weakest since March 1. It declined to 78.989 yen. Since Parity Canada’s dollar reached parity with its U.S. counterpart on Oct. 14 for the first time since April. It has weakened 2.2 percent since then as the Bank of Canada halted interest-rate increases, citing a “weaker U.S. outlook.” Canada ships about two thirds of its exports to the U.S. The MSCI World Index of equities climbed 0.8 percent. Futures on crude oil, Canada’s biggest export, rose 0.5 percent. Canada’s benchmark 10-year note’s yield was little changed at 2.89 percent. The price of the 3.5 percent security maturing in Jun 2020 fell 1 cent to C$105.10. Canada’s government bonds have lost investors 0.4 percent this month, according to a Merrill Lynch & Co. index. Canadian 10-year bonds yielded 18 basis points more than their U.S. counterparts yesterday, near the narrowest gap in almost three months and down from as much as 37 basis points on Oct. 7. Longer-term bond prices are falling faster in the U.S. than in Canada, pushing yields up more quickly. Economic Pace Canada’s gross domestic product increased 0.3 percent in August, after a 0.1 percent drop in July, according to the median of 24 forecasts in a Bloomberg News survey. Statistics Canada releases the data tomorrow in Ottawa. Bank of Canada Governor Mark Carney reiterated yesterday the country’s economy has “considerable” stimulus from his 1 percent benchmark interest rate and further moves to tighten policy would be “carefully considered.” The central bank last week lowered its economic growth forecast for the next five quarters and kept its key lending rate unchanged after three prior increases. 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

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