Canada’s dollar advanced as stronger-than-forecast Chinese growth renewed demand for higher- yielding assets and tempered concern that Europe’s widening sovereign-debt crisis threatens the global economic recovery. The loonie, as Canada’s currency is also known for the waterfowl on the C$1 coin, rose for a second day against its U.S. counterpart. It climbed along with other commodity-linked currencies such as the Australian and New Zealand dollars on speculation China’s demand for natural resources will spur growth. Raw materials, including crude oil and copper, account for half of Canada’s export revenue. “It’s risk back on,” Geoffrey Yu, a currency strategist at UBS AG, said by telephone from London. “I still like the Canadian dollar against many other currencies.” The loonie advanced as much as 0.7 percent to 96 cents per U.S. dollar before trading at 96.31 cents, up 0.4 percent, at 9:04 a.m. in Toronto. It closed at 96.66 cents yesterday. One Canadian dollar buys $1.0383. Canada’s dollar slipped 0.1 percent against the euro. The 17-nation currency rose against all but four major counterparts as Italian bonds rallied for a second day, easing concern that the region’s debt crisis may spread beyond Greece, Ireland and Portugal to larger economies. The New Zealand and Australian dollars were the top performers. “There’s no denying there are many structural problems within the euro zone, but there’s a grudging acknowledgement that some sort of soft restructuring or even harder restructuring is going to be applied to Greece in the coming weeks, and they’re just inching toward a structural solution,” Yu said. “That’s positive at least.” Chinese Growth Copper rose for a second day in London after economic growth topped estimates in China, the world’s largest consumer of the metal. Gross domestic product climbed 9.5 percent from a year earlier in the second quarter, the statistics bureau said today, exceeding the 9.3 percent median estimate of 18 economists surveyed by Bloomberg News. Canada’s government bonds fell, pushing the 10-year yield higher by four basis points to 2.93 percent, as the price of the 3.25 percent security due in June 2021 dropped 32 cents to C$102.73. A basis point is 0.01 percentage point. The nation’s sovereign securities have returned 1.2 percent this month and are up 3 percent in 2011, according to the Bank of America Merrill Lynch Canadian Governments index. Canada’s dollar has weakened 0.8 percent this year versus the currencies of nine other developed nations, according to Bloomberg Correlation-Weighted Currency Indexes. The greenback has fallen 4.6 percent, the yen is off 2.2 percent, sterling is down 2.3 percent and the Swedish krona is lower by 2.2 percent. To contact the reporter on this story: Chris Fournier in Halifax, Nova Scotia at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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