By Ruby Madren-Britton Nov. 30 (Bloomberg) -- The Canadian dollar strengthened as a government report showed the nation’s economy grew from July through September for the first time in four quarters. The currency gained against 11 of its 16 most-traded counterparts tracked by Bloomberg, rising for the first time in three days. It trailed the dollars of fellow commodity exporters Australia and New Zealand. The U.S. dollar fell against 11 of the 16 after the United Arab Emirates’ central bank said it “stands behind” the country’s lenders, reviving demand for higher-yielding assets. “The Canadian dollar has gained some ground back, though it is still underperforming the Australian and New Zealand dollars,” said Camilla Sutton, a currency strategist in Toronto at Bank of Nova Scotia, the nation’s third-largest bank. “The big news remains Dubai, with markets gaining comfort that there won’t be contagion and therefore feeling more confident.” Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, appreciated 0.2 percent to C$1.0599 per U.S. dollar at 9:53 a.m. in Toronto, from C$1.0618 on Nov. 27. It was poised for a monthly gain of 2.4 percent. One Canadian dollar buys 94.35 U.S. cents. The loonie pared gains as U.S. stocks and crude oil, Canada’s biggest export, fluctuated. Canadian gross domestic product expanded at an annual rate of 0.4 percent in the third quarter, from a revised 3.1 percent drop in the second, Statistics Canada said in Ottawa. The rise was below the median forecast in a Bloomberg News survey of 21 economists for a 1 percent advance. GDP grew 0.4 percent in September from a month earlier, in line with forecasts. Dubai World The Abu Dhabi-based U.A.E. central bank said yesterday banks will be able to borrow using a special facility tied to their current accounts. State-owned Dubai World, which is struggling with $59 billion of debt and other liabilities, said Nov. 25 it would seek a standstill agreement with creditors and an extension of loan maturities until at least May 30, 2010. The announcement led to a slump in global equity markets and raised the prospect of new loan losses for U.A.E. and foreign banks. The Canadian dollar will strengthen to C$1.03 against the greenback by the end of March 2010, according to the median forecast in a Bloomberg survey of 37 economists. To contact the reporter on this story: Ruby Madren-Britton in New York at rmadrenbritt@bloomberg.net

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