Canada’s dollar gained to a five- month high against its U.S. counterpart on optimism demand for raw materials will accelerate as the global economy expands. The currency advanced for a fourth day, the longest string of gains in more than a month, as jobless claims in the U.S., Canada’s biggest trade partner, fell to the lowest level in four years. It rose versus the majority of its most-traded peers. Data tomorrow may show the nation’s economy grew in the fourth quarter. China’s manufacturing expanded, a report showed. “The data coming out at the moment from the major economies seems reasonably encouraging,� said Tom Levinson, a currency strategist in London at ING Groep NV. In the absence of “another issue from the euro zone, the expectation would be that those riskier assets, commodities, commodity currencies and emerging market high-yielding currencies all extend the gains that they’ve already put on this year.� Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, advanced 0.5 percent to 98.52 cents per U.S. dollar at 10:21 a.m. in Toronto. It reached 98.42 cents, the strongest since Sept. 19. One Canadian dollar purchases $1.0150. The loonie trimmed gains after a gauge of U.S. manufacturing fell in February. The Institute for Supply Management’s factory index declined to 52.4, from 54.1 a month earlier, the Tempe, Arizona-based group’s data showed today. Raw Materials The Canadian currency has gained 3.6 percent this year versus the U.S. dollar on increased demand for higher-yielding assets. Crude oil rose 0.6 percent today to $107.50 a barrel in New York after gaining 8.8 percent in February. Canada derives about half its export revenue from raw materials such as crude, its biggest export, and copper, lumber, gold and wheat. The Standard & Poor’s 500 Index rose 0.4 percent. Applications for unemployment benefits in the U.S. fell to 351,000 in the week ended Feb. 25, a level matching the lowest since March 2008, Labor Department figures showed today. Economists in a Bloomberg survey forecast 355,000 claims. In China, the purchasing managers’ index rose for a third month, rising to 51.0 from 50.5 in January, the statistics bureau and logistics federation said in a statement today. It was the highest level since September. The dividing line between expansion and contraction is 50. The Canadian dollar remained higher as data showed then nation’s current account deficit for the fourth quarter narrowed to C$10.3 billion ($10.5 billion) compared with a revised C$12.3 billion in the third quarter, Statistics Canada said today in Ottawa. A Bloomberg survey forecast a C$9.6 billion shortfall. Bonds Fall Canada’s government bonds fell, pushing the yield on the benchmark 10-year note up three basis points, or 0.03 percentage point, to 2.01 percent. The price of the 3.25 percent security due in June 2021 dropped 25 cents to C$110.39. The loonie rose for a second day versus the euro, its first back-to-back gains in two weeks, as euro-area finance ministers gathered in Brussels to discuss the region’s sovereign-debt crisis. It appreciated 0.4 percent to C$1.3137 to the 17-nation currency. The Canadian dollar climbed 1.5 percent yesterday against the euro, the most since May 2011, after the European Central Bank loaned 800 euro-area banks 529.5 billion euros ($712.2 billion) to shore up liquidity. The loonie gained 1 percent over the past week against nine developed-nation counterparts monitored by Bloomberg Correlation Weighted Currency Indexes. The U.S. dollar fell 0.3 percent, and the euro declined 0.7 percent. To contact the reporters on this story: Austen Sherman in New York at asherman18@bloomberg.net; Chris Fournier in Montreal at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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