Canada’s dollar strengthened against the greenback and the euro to the highest levels in more than a month after an ADP Employer Services report showed U.S. companies added more jobs in June than forecast. The Canadian dollar, also known as the loonie, rose against all except two of its 16 most-traded peers, appreciating more than 1 percent versus the yen after the European Central Bank raised interest rates and as gains in copper and crude oil made currencies linked to raw materials more attractive. “The ADP number was surprisingly strong, and that has helped the Canadian dollar,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, in a telephone interview from Toronto. “By default, what’s good for the U.S. economy is good for Canada.” The Canadian currency rose 0.7 percent to 95.87 cents per U.S. dollar at 5:02 p.m. in Toronto. Earlier it touched 95.69, the strongest since May 10. One Canadian dollar buys $1.0433. The loonie gained 0.4 percent to C$1.3764 per euro. It rose 1.1 percent to 84.76 cents per yen -- having earlier touched 84.93, the strongest since May 19. Job Trends Companies in the U.S. added 157,000 workers to their payrolls in June, according to ADP figures, more than double the median estimate of economists surveyed by Bloomberg News, which called for gains of 70,000. The data comes before the government’s June payrolls report tomorrow. “Over the last week and a half we’ve seen a general improvement in risk appetite,” said Adrian Schmidt, a currency strategist at Lloyds Banking Group Plc in London. “The bigger questions are all about how risk performs in general, about how equities perform in general, how commodities perform in general following the U.S. numbers later in the week.” Canada’s economy added 15,000 jobs in June, after boosting payrolls by a net 22,300 positions in May and 58,300 in April, according to the median forecast of 23 economists surveyed by Bloomberg before Statistics Canada data tomorrow. The jobless rate held at 7.4 percent, according to the survey. Canada’s government bonds have returned 2.21 percent this year, according to a Bank of America Merrill Lynch index. The Canadian dollar has gained 4.1 percent against its U.S. counterpart in the period. Government Yields Yields on two-year Government of Canada bonds rose four basis points, or 0.04 percent, to 1.58 percent, pushing the price of the 2 percent note due in August 2013 down 9 cents to C$100.85. The yield on the 10-year note climbed one basis point to 3.05 percent as the price of the 3.25 percent security maturing in June 2021 declined 10 cents to C$101.67. Canada’s new home price index rose 0.4 percent in May, twice the pace estimated by analysts, based on gains in the country’s two largest cities. The selling price of new dwellings rose 0.9 percent in Toronto during the month, and by 0.5 percent in Montreal, Statistics Canada said today in Ottawa. Economists predicted the overall index would rise 0.2 percent in May following April’s 0.3 percent gain, according to the median estimate in a Bloomberg survey with 10 responses. Crude oil futures rose 1.9 percent to $98.49 a barrel in New York. Crude is Canada’s largest export. Copper for October delivery jumped 2.3 percent to $9,737 a metric ton on the London Metal Exchange. Canada derives about half its export revenue from raw materials. ECB Moves European Central Bank Officials meeting in Frankfurt today increased the benchmark interest rate by 25 basis points to 1.5 percent, matching forecasts by all 55 economists in a Bloomberg News survey. That’s the highest since March 2009. The central bank will raise borrowing costs further in October, according to a separate survey. ECB President Jean-Claude Trichet said he will ease Portugal’s access to emergency funds as officials battle both faster inflation and the debt crisis. The decision on Portugal came after Moody’s Investors Service sparked a renewed selloff in euro region bond markets after saying on July 5 the country may need a second bailout package. “We are long way away from a solution of any sort in Europe,” Scotia Capital’s Sutton said. “In the near term, authorities are telling us that they are going to do everything to support things, and that’s provided some relief. However the bigger, broader question of a solution is still many quarters away, and is likely to be a difficult one.” To contact the reporter on this story: Chris Fournier in Halifax, Nova Scotia at cfournier3@bloomberg.net Frederic Tomesco in Montreal at tomesco@bloomberg.net. To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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