Canada’s dollar touched the highest level in more than a week versus its U.S. counterpart, trading in a narrow range while crude oil dropped for a second day and U.S. stocks showed small gains. “It seems like a quiet start to the week, with the market unsure if risk is on or off,” Shaun Osborne, chief currency strategist in Toronto at Toronto-Dominion Bank’s TD Securities unit, said by instant message. “We’re really looking for a catalyst to instill a stronger sense of direction.” The Canadian currency climbed as much as 0.3 percent to C$1.0331 per U.S. dollar, the strongest level since July 15. It weakened as much as 0.3 percent before trading at C$1.0340 at 9:31 a.m. in Toronto, compared with C$1.0358 on July 23. One Canadian dollar buys 96.73 U.S. cents. The Standard & Poor’s 500 Index gained 0.2 percent. Crude oil for September delivery declined 0.9 percent. The Canadian dollar, nicknamed the loonie, tends to rise and fall with commodity prices as a proxy for risk appetite. The Canadian dollar will trade at C$1.05 versus the greenback by year-end, after hitting C$1.12 to C$1.13 in the autumn as the U.S. dollar strengthens, said Osborne, who was rated the most accurate among 48 currency forecasters in a Bloomberg News survey. The loonie, which traded on a one-for-one basis with the greenback on April 6 for the first time in almost two years, has gained 5 percent this year, according to Bloomberg Correlation- Weighted Currency Indices, the second-best performance among its 10 developed world counterparts behind the yen’s 11 percent increase. Rates Favor Loonie “Expect interest-rate differentials to favor the Canadian dollar,” Dean Popplewell, an analyst at online currency-trading firm Oanda Corp. in Toronto, said in an e-mail. “Technically the currency is looking to close higher as long as we close below this C$1.0424 level.” Bank of Canada Governor Mark Carney leads colleagues in the Group of Seven with rate increases as Canada’s economic growth and job creation rebound faster from the global recession. Carney raised the target rate for overnight loans between commercial banks to 0.75 percent on July 20. The U.S. Federal Reserve left its key rate near zero last month and renewed a pledge to keep it low for an “extended period.” Minutes of the June 22-23 session, released July 14, show officials saw no need to boost stimulus, while paring their growth forecasts and noting risks to the recovery had increased. The Canadian 10-year note’s yield rose two basis points, or 0.02 percentage point, to 3.23 percent. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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