BLBG: Canada Dollar Gains Most in Two Weeks as Gold, Crude Oil Climb
By Chris Fournier
Nov. 23 (Bloomberg) -- Canada’s currency appreciated the most in two weeks against its U.S. counterpart as gold and crude oil climbed, burnishing the appeal of currencies tied to commodity prices.
“The overnight spike in gold prices really got things going,” said George Davis, chief technical analyst for fixed- income and currency strategy in Toronto at Royal Bank of Canada, the nation’s biggest lender. “The U.S. dollar got sold across the board against all the major currencies, then it became a type of position-squaring exercise.”
The Canadian currency advanced 1.4 percent, the most on an intraday basis since Nov. 9. to C$1.0557 per U.S. dollar at 9:01 a.m. in Toronto, from C$1.0706 on Nov. 20. One Canadian dollar buys 94.72 U.S. cents.
Canada’s dollar, up 15 percent this year on a rebound in commodity prices, will strengthen to C$1.05 by year-end, according to the median forecast of 37 economists and analysts surveyed by Bloomberg News. Raw materials account for more than half Canada’s export revenue.
The U.S. dollar “might still be a little bit vulnerable to the downside,” said Davis. “A lot of it will depend on how the equity markets do.”
The greenback fell today against all 16 of its most-traded counterparts tracked by Bloomberg. Canada’s dollar was the second-best performer behind the currency of fellow commodity exporter South Africa.
Gold Reaches Record
Gold jumped to a record as a slumping dollar boosted bullion’s appeal as an alternative asset. December gold futures rose as much as 1.8 percent to $1,167.80 an ounce in New York.
Crude oil for December delivery rose 2.6 percent to $78.71 a barrel on the New York Mercantile Exchange. Crude, Canada’s largest export, gained 76 percent this year.
Futures on the Standard & Poor’s 500 Index climbed 1 percent. The MSCI World Index, a gauge of equities in 23 developed nations gained 0.9 percent.
Canadian retail sales rose 1 percent in September to C$34.9 billion ($33 billion), led by automotive, food and general merchandise shops, Statistics Canada said today in Ottawa. Economists expected a 0.6 percent increase, based on the median of 20 estimates compiled by Bloomberg.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
