BLBG: Canadian Currency Climbs to One-Month High as Stocks, Oil Rise
By Chris Fournier
July 15 (Bloomberg) -- Canada’s currency appreciated for a third consecutive day, touching the highest in a month, after U.S. stock-index futures jumped and crude oil climbed back above $60 a barrel.
“The market is coming around to the idea that the Canadian dollar is a good vehicle to express the view that production activity is likely to pick up over the summer, particularly the auto sector,” said Daniel Katzive, a currency strategist at Credit Suisse in New York.
The currency, known as the loonie, climbed 0.8 percent to C$1.1242 per U.S. dollar at 8:58 a.m. in Toronto, from C$1.1329 yesterday. It touched C$1.1222, the strongest since June 15. One Canadian dollar purchases 88.96 U.S. cents.
The loonie remained higher after a government report showed Canadian factory sales dropped 6 percent in May, more than twice as fast as economists forecast, and the U.S. consumer price index increased 0.7 percent in June, the biggest advance since July 2008.
Canada’s dollar will strengthen to C$1.12 against its U.S. counterpart by year-end, according to the median forecast in a Bloomberg News survey of 35 economists.
The loonie was the worst performer against the U.S. dollar in June among the 16 most-traded currencies tracked by Bloomberg. So far this month it outperformed all of them.
“There has been U.S. dollar selling as the risks tilted, and few were confident of getting better levels to sell,” said David Watt, senior currency strategist in Toronto at RBC Capital Markets, a unit of Canada’s biggest bank. He said he’s looking for the Canadian dollar to pull back to between C$1.12 and C$1.13.
Today the U.S. dollar was the worst performer among the 16 most-traded currencies. Canada’s commodity-linked peers, the dollars of New Zealand and Australia, rose 1.4 percent and 1.2 percent, respectively, against the greenback.
Futures on the Standard & Poor’s 500 Index increased 1.3 percent. Crude oil for August delivery advanced 2.3 percent to $60.86 a barrel in New York. Oil is Canada’s biggest export.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
