BLBG:Canadian Dollar Gains Fourth Day After Cyprus Bailout Deal
The Canadian dollar gained for a fourth day against its U.S. counterpart after Cyprus’ deal to secure bailout funds from European lenders bolstered investor demand for assets of nations with higher-returning currencies.
The dollar rose against the majority of its most-traded peers after the Mediterranean nation agreed to wind down its second biggest bank, wiping out bondholders, and tax uninsured deposits at its largest bank, in order to secure emergency funds to stave off bankruptcy and prevent a forced exit from the euro. Canada will report March 28 gross domestic product grew 0.1 percent in January after contracting the month before, according to the median estimate of a Bloomberg survey of 21 economists.
“We’ve had a little bit of a relief rally on the fact we’re not going to get a major implosion on Cyprus today,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce, by phone from London. “After nine- consecutive weeks of shorts being extended I think there’s potential opportunity, if we do see some slightly firmer numbers, particularly in terms of the GDP data on Thursday, for perhaps a little bit of a Canadian dollar recovery.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, rose 0.4 percent to C$1.0191 per U.S. dollar at 8:05 a.m. in Toronto. One loonie buys 98.13 U.S. cents.
Future traders increased their bets that the Canadian dollar will decline against the U.S. dollar to the highest level since March 2007, figures from the Washington-based Commodity Futures Trading Commission showed last week.
The difference in the number of wagers by hedge funds and other large speculators on a decline in the Canadian dollar compared with those on a gain -- so-called net shorts -- was 65,331 on March 19, compared with net shorts of 53,397 a week earlier.
To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
