BLBG: Canada’s Dollar Gains for 3rd Day Amid Economic Growth Optimism
Canada’s dollar appreciated for a third day against its U.S. counterpart before data that may show the world’s largest economy is recovering.
The Canadian currency touched the strongest level in more than a week yesterday and is among the top three performers in Bloomberg correlation weighted indexes over the past month. The Standard & Poor’s 500 Index is up 2 percent this week, with futures indicating the index will extend that gain today.
“Stocks have had a great week; the Canadian dollar is following suit,” said Steve Butler, director of foreign- exchange trading in Toronto at Bank of Nova Scotia’s Scotia Capital unit, in an e-mail message. “It looks like markets will stay risk-on going into year-end. Overall, the U.S. dollar will rally hard in the first quarter, but for now you cannot fight the risk rally.”
Canada’s currency, nicknamed the loonie for the aquatic bird on the dollar coin, gained 0.2 percent to 1.0248 per U.S. dollar at 7:46 a.m. in Toronto. It appreciated 0.2 percent to 76.19 yen, and was up 0.1 percent to C$1.3386 versus the euro. One Canadian dollar buys 97.58 U.S. cents.
The Thomson Reuters/University of Michigan final index of consumer sentiment increased to 68 in December from the previous estimate of 67.7, a Bloomberg poll showed.
The Conference Board’s index of leading economic indicators may signal continued expansion in the world’s largest economy in the first half of 2012. The gauge rose 0.3 percent in November after a 0.9 percent gain the prior month, according to a Bloomberg News survey of economists.
Futures on the Standard & Poor’s 500 Index climbed 0.5 percent.
‘Corporate Repatriation’
The loonie is rising partly because of “corporate repatriation of foreign revenue back to the Canadian dollar for year-end,” said C.J. Gavsie, managing director for currency trading in Toronto at Bank of Montreal, in an e-mail message. The currency will remain stronger as long as the euro remains above $1.30, he said.
That the loonie is gaining on optimism about a U.S. economic recovery is a “fair statement,” Gavsie said, “but everyone is still on high alert with European debt news.”
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
