Canada’s dollar rose to the highest level versus its U.S. counterpart in more than two weeks on speculation the Federal Reserve will announce debt purchases that debase the greenback. Futures on crude oil, Canada’s largest export, rose to a six-month high. The loonie may get a boost should Canada’s Industry Minister Tony Clement allow a $40 billion foreign takeover of Potash Corp. of Saskatchewan Inc. “It could be good for some Canadian dollar gains,” Sacha Tihanyi, a currency strategist at Bank of Nova Scotia’s Scotia Capital unit, wrote via e-mail, referring to the possibility that Clement will allow the purchase of Potash. The Canadian currency traded at C$1.0069 per U.S. dollar at 8:23 a.m. in Toronto, compared with C$1.0082 yesterday. It touched C$1.0064, the strongest level since Oct. 15. One Canadian dollar buys 99.32 U.S. cents. Saskatchewan is poised to sue the federal government if Canada approves Melbourne-based BHP Billiton Ltd.’s hostile takeover offer for Potash, Premier Brad Wall told reporters yesterday in Regina. Clement is due to say whether the takeover may proceed after stock markets close at 4 p.m. in New York. Canada’s dollar “stands to underperform on the crosses should QE be less than expected,” wrote Tihanyi, referring to non-U.S. dollar trades, “as worries that less monetary stimulus in the U.S. feeds its way negatively into the Canadian economy and generally hurts global risk asset prices.” New debt purchases by the Fed to stoke the recovery and boost prices under an extension of quantitative easing would follow acquisitions of $1.7 trillion in Treasuries and mortgage debt that ended in March. A statement from the U.S. central bank is due at 2:15 p.m. Washington time after a two-day meeting. 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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