BLBG: Canadian Dollar Gains as Libyan Uprising Pushes Crude Oil Prices Higher
The Canadian dollar advanced to within a quarter-cent of a two-year high versus the greenback as Libya’s uprising pushed oil toward $120 a barrel in London.
The loonie, as the Canadian currency is also known for the image of the aquatic bird on C$1 coin, rose against most of its major counterparts. The currency advanced the most in nine trading days versus the U.S. dollar as crude oil, Canada’s biggest export, advanced to its highest level since September 2008 in New York trading. Government bonds rose.
“Because of the tensions in the Middle East, we’re seeing oil prices rise, and that’s translating to a stronger Canadian dollar,” said Eric Viloria, senior currency strategist a Gain Capital Group LLC in New York. “Since Canada is such a large exporter of oil, that’s going to increase the value of its exports, which adds to growth. Higher growth could potentially lead to higher interest-rate expectations.”
Canada’s dollar appreciated 0.7 percent to 98.27 cents per U.S. dollar at 8:31 a.m. in Toronto, from 98.95 cents yesterday. It earlier gained 0.8 percent, the most on an intraday basis since Feb. 11. The loonie reached 98.16 cents on Feb. 17, the strongest since March 2008. One Canadian dollar buys $1.0180.
Government bonds rose, driving the yield on the two-year security down two basis points, or 0.02 percentage point, to 1.78 percent. The price of the 1.75 percent security maturing in March 2013 increased 4 cents to C$99.95.
Crude for April delivery advanced as much as 5.4 percent to $103.41 a barrel in New York, before trading at $100.64.
As much as 1 million barrels of Libya’s daily oil production may have been shut, Barclays Plc said in a report yesterday. Goldman Sachs Group Inc. estimated disruptions at 500,000 barrels a day.
Libya pumps 1.6 million barrels of oil a day, selling most of it to Europe, according to Bloomberg estimates. That’s about 1.8 percent of world supply.
To contact the reporter for this story: Allison Bennett in New York at abennett23@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
