Canada’s dollar rose versus its American counterpart before European bank stress-test results as investors wagered the nation’s economy would withstand tepid growth in the U.S., its largest trading partner. The loonie, as the currency is nicknamed, outperformed all 16 of its major peers and is headed for a five-day gain versus the greenback. Standard & Poor’s said there’s a 50 percent chance the U.S. will lose its top credit rating. “The Canadian dollar is a bit of a haven from the U.S. because if you want to invest in North America, you don’t have the fiscal problems in Canada as you do in the states, so you get an inflow of money,” said Paul Robson, a senior foreign- exchange strategist at Royal Bank of Scotland Group Plc, by phone from London. “You do see foreign buyers of bonds shifting their money out of Treasuries and into Canadian bonds, and that’s supportive.” The Canadian currency appreciated 0.2 percent to 95.83 cents per U.S. dollar at 7:45 a.m. in Toronto, compared with 96.06 cents yesterday. One Canadian dollar buys $1.0435. Foreign investors purchased more Canadian bonds than they sold in every month but one since December 2008, according to Statistics Canada data through April. The agency will report international securities transactions for May on July 18. The European Banking Authority will release the results of the stress tests for regional banks as part of an effort to reassure investors that lenders have sufficient capital. The assessments are the first by the EBA since it was set up earlier this year. The results will be published from 5 p.m. U.K. time. “You could easily get a risk rally once you have the publication of the stress tests because I don’t think they’re going to be too dramatic,” said RBS’s Robson. To contact the reporter on this story: Chris Fournier in Halifax, Nova Scotia at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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