Canada’s dollar rose for the first time in five weeks as Federal Reserve Chairman Ben S. Bernanke said the economy of Canada’s largest trading partner isn’t weak enough to warrant immediate additional stimulus. The currency, sometimes known as the loonie for the aquatic bird on the dollar coin, rallied this week versus the greenback as equities gained on Bernanke’s comment that the U.S. economy is likely to recover in the second half of this year. Canada’s gross domestic product stagnated in the second quarter, a government report is forecast to show next week. “Equities have been the primary driver of the Canadian dollar,” said Michael Leavitt, a institutional-derivatives broker at MF Global Canada Co. in Montreal. “I’d expect the same for the most part until we get GDP in Canada next week. We’re in a wait-and-see mode. It’s not the time to be sticking your neck out.” The Canadian currency appreciated 0.9 percent to 98.14 cents per U.S. dollar, from 99.01 cents on Aug. 19. One Canadian dollar buys $1.0190. The Standard & Poor’s 500 Index rallied 4.7 percent. The S&P/TSX Composite Index climbed 2.7 percent. Crude oil for September delivery gained 4.1 percent to $85.60 a barrel in New York trading. Raw materials including crude account for about half of Canada’s export revenue. Bonds Fall Benchmark 10-year government bonds dropped for the first time in five weeks, pushing the yields up nine basis points, or 0.09 percentage point, to 2.39 percent. The price of the 3.25 percent securities maturing in June 2021 decreased 85 cents to C$107.41. The yield fell on Aug. 18 to 2.25 percent, the lowest in Bloomberg data beginning in 198. Canada’s dollar rose to a three-year high of 94.07 cents on July 26 before plunging to below parity on Aug. 9 on mounting concern the U.S. economy, the consumer of three-quarters of Canada’s exports and the primary market for its energy products, may be heading into another recession. The loonie has also fallen on speculation Europe’s sovereign-debt crisis will sap risk demand. The currency has traded within a two-cent range of 97.67 cents to 99.69 since Aug. 9, the day the Fed announced it would hold its target lending rate at a record low through at least the mid-2013. Fed Action While Bernanke sought in his address yesterday in Jackson Hole, Wyoming, to reassure investors and the public that U.S. growth is safe in the long run and that the Fed still has tools to aid the recovery if needed, he stopped short of indicating that the central bank will move ahead with a third round of government bond-buying. “The Fed is taking a timeout, and Bernanke is passing the buck,” said Dean Popplewell, head analyst in Toronto at the online currency-trading firm Oanda Corp. “We have to wait until Monday to gauge the real market attitude, and by then dealers will have shifted their attention back to Europe’s woes.” Canada’s economy was unchanged in the three months through June after expanding 3.9 percent in the first quarter, according to the median forecast of 16 economists in a Bloomberg News survey. The report from Statistics Canada is due Aug. 31. Popplewell said appreciation in the Canadian dollar to about 98 cents would encounter resistance, meaning buyers of U.S. dollars would emerge at that level. The Canadian dollar has fallen 5 percent this year, according to Bloomberg Correlation-Weighted Currency Indexes, a gauge of 10 developed-market currencies. Only the greenback has performed worse, dropping 6.8 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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