Canada’s dollar touched the strongest level in more than a year amid speculation a global recovery may quicken as stocks and commodities rose, U.S. jobless claims fell and Australia posted better-than-expected jobs data. The Canadian currency, nicknamed the loonie, is headed for a 2.6 percent gain this week, the most since July. Crude oil, the nation’s biggest export, climbed more than 4 percent and gold rose to the highest ever, increasing the appeal of currencies tied to growth and damping demand for the U.S. dollar. The greenback fell today against the 16 most-traded currencies tracked by Bloomberg. “All signs are great for the Canadian dollar,” said Firas Askari, head currency trader in Toronto at BMO Capital Markets, a unit of Canada’s fourth-largest lender. The only reason the currency isn’t stronger is “everyone is already long the Canadian dollar.” A long position is bet a currency will rise. The Canadian currency appreciated 0.9 percent to C$1.0520 per U.S. dollar at 4:50 p.m. in Toronto, from C$1.0612 yesterday. It touched C$1.0506, the strongest level since Sept. 30, 2008. One Canadian dollar buys 95.06 U.S. cents. The loonie briefly pared gains after Paul Jenkins, Bank of Canada senior deputy governor, said persistent strength in the Canada’s dollar remains a risk to its economic recovery. Jenkins also repeated the central bank’s commitment to keep the benchmark interest rate at a record low 0.25 percent through June 2010 unless the inflation outlook shifts, according to the text of his speech today in Vancouver. ‘Subtle Reminder’ Jenkins’ comments “were a subtle reminder the Bank of Canada is watching the Canadian dollar very closely,” said Steve Butler, director of foreign-exchange trading in Toronto at Scotia Capital Inc., a unit of Canada’s third-largest bank. “The way the market traded today, expectations are mounting for much stronger-than-expected data tomorrow.” Canadian employers likely added 5,000 jobs last month, according to the median forecast of 23 economists surveyed by Bloomberg News. Statistics Canada is due to release the report at 7 a.m. New York time tomorrow. “The big data point is tomorrow’s employment report,” Shaun Osborne and Jacqui Douglas, currency strategists in Toronto at TD Securities Inc., a unit of the nation’s second- biggest bank, wrote in a note to clients. “Strong data today and tomorrow will likely see the spot market challenge the C$1.05 area.” Canadian housing starts fell 4.6 percent in September to a seasonally adjusted annual pace of 150,100 units, Canada Mortgage and Housing Corp. said today. That’s more than the 148,000-unit median forecast of 23 economists in a Bloomberg survey. 16 Percent Gain Canada’s dollar is 16 percent higher this year against its U.S. counterpart as a recovery in the world’s economy from the worst financial crisis since the Great Depression sparks demand for commodities. Canada gets more than half its export revenue from raw materials. U.S. stocks rallied after Alcoa Inc. started the third- quarter earnings season with an unexpected profit. The Standard & Poor’s 500 Index advanced 0.8 percent. The MSCI World Index, a measure of equities in 23 developed markets, gained 1.4 percent. Crude oil for November delivery increased 2.7 percent to $71.43 a barrel on the New York Mercantile Exchange, extending the advance this year to 60 percent. Earlier it climbed 4.3 percent to $72.55 a barrel. The Reuters/Jefferies CRB Index of 19 raw materials increased 2.1 percent. Gold futures on the New York Mercantile Exchange’s Comex division climbed as high as $1,062.70 an ounce, setting a record for a third day. December-delivery copper rose as much as 4.4 percent to $2.9010 a pound. Correlation With Crude The Canadian dollar has a 30-day correlation coefficient of 0.76 with crude oil, compared with 0.49 over the past year, according to Bloomberg data. That indicates moves between the currency and oil are becoming more closely aligned. A reading of 1 would indicate they move in lockstep. The number of Americans filing first-time claims for unemployment benefits fell last week to the lowest since January, 521,000, fewer than forecast, Labor Department data showed today in Washington. The total number of people collecting jobless insurance dropped in the prior week to the least since March. A government report in Australia yesterday showed the country’s jobless rate fell for the first time in five months as employers added the largest number of workers in almost two years. Australia’s dollar, which like Canada’s tends to rise and fall with commodities, climbed 1.7 percent against the greenback today, the biggest gain among the most-traded currencies. Bond Auction Canada will auction C$1.5 billion ($1.4 billion) of 30-year bonds on Oct. 15, according to a statement on the Bank of Canada’s Web site today. The 4 percent securities mature in June 2041, the statement said. Canadian government bonds fell, pushing the two-year note’s yield up 10 basis points, or 0.1 percentage point, to 1.33 percent, the highest level since Aug. 24. The price of the 1 percent security maturing in September 2011 decreased 17 cents to C$99.39. To contact the reporter on this story: Chris Fournier in Montreal at

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