The Canadian dollar advanced to the highest level in more than three years against its U.S. counterpart as government bond yields fell after the sale of two-year securities. The dollar gained against 13 of the 16 most-traded currencies as the Bank of Canada sold $3 billion of two-year bonds at an average yield of 1.867 per cent. Equities fell on reports that U.S. supplies of crude oil surged to all-time highs amid escalating violence in Libya. "Yields are a more compelling explanation of the strength of the Canadian dollar," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. "The Bank of Canada has already taken action to normalize money-market conditions so bonds are giving high yield and still benefiting from the economic recovery."
