BLBG: Canada’s Dollar is Little Changed as Rally ‘Runs Out of Steam’
By Chris Fournier
July 23 (Bloomberg) -- Canada’s dollar was little changed against its U.S. counterpart amid speculation that the almost 6 percent gain by the currency in two weeks may be overdone.
“What we saw in the last few days was a steep rise in commodity prices especially oil and a very good performance of riskier assets,” said Ulrich Leuchtmann, head of currency strategy in Frankfurt at Commerzbank AG. “This is running out of steam. That was the main driver in the strength of commodity currencies,” including the Canadian dollar.
The Canadian currency traded at C$1.0977 per U.S. dollar at 8:02 a.m. in Toronto, from C$1.0997 yesterday, when it reached C$1.0951, the strongest level since June 11. One Canadian dollar buys 91.10 U.S. cents.
Canada’s dollar is the best performer this month against the greenback among the 16 most-active currencies, gaining 5.8 percent. The dollars of New Zealand and Australia, which like Canada’s tend to rise and fall with equities and commodities, rose 2.1 percent and 1.4 percent, respectively, in that period.
The loonie, as the Canadian currency is known, has climbed 1.8 percent so far this week. U.S. stock index futures rose. Crude oil, Canada’s biggest export, was little changed.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
