By Oliver Biggadike Jan. 4 (Bloomberg) -- The Canadian currency gained, approaching the strongest level against the U.S. dollar since October, as a rally in crude oil spurred demand for assets that historically benefit when the global economy expands. Canada’s dollar advanced against most of its 16 major counterparts as oil, the nation’s biggest export, traded above $81 a barrel for the first time since November. The greenback fell against all of them. The loonie, as the Canadian currency is nicknamed for the image of the waterfowl on the C$1 coin, gained the most last year since 2007 as commodities increased. “Cyclically speaking the Canadian dollar definitely stands to benefit as we move through this recovery,” said Sacha Tihanyi, a strategist in Toronto at Bank of Nova Scotia, Canada’s third-largest lender. “If you have a constructive view on global growth you have to be fairly confident about capital preservation in hard commodities such as oil.” The Canadian currency appreciated 1.2 percent to C$1.0399 per U.S. dollar at 9:59 a.m. in Toronto, from C$1.0532 on Dec. 31. It touched $1.0372, near the C$1.0367 it reached on Dec. 29, the strongest level in more than two months. One Canadian dollar purchases 96.16 U.S. cents. Government bonds were little changed, with Canada’s benchmark 10-year security yielding 3.61 percent. The price of the 3.75 percent note due in June 2019 fell 2 cents to C$101.10. Third-Best Performer The loonie was the third-best performer against the greenback after the Swedish krona and the krone of Norway, also an oil producer. The Australian and New Zealand dollars lagged behind the gains in Canada’s currency, advancing 1.1 percent and 0.9 percent respectively. Crude oil for February delivery rose as much as 2.9 percent to $81.68 a barrel in electronic trading on the New York Mercantile Exchange before trading at $81.41. Copper climbed to a 16-month high as a strike began at the world’s second-biggest mine, Codelco’s Chuquicamata facility in northern Chile, and a purchasing managers’ index showed Chinese manufacturing expanded last month by the most in five years. The price of copper for March delivery gained 2 percent to $3.412 a pound on the New York Mercantile Exchange’s Comex unit after touching $3.429, the highest price since August 2008. Gold for immediate delivery rose 2.4 percent to $1,123.20 an ounce. Raw materials including crude, copper and gold account for half of Canada’s export revenue. Global stocks rose, with the MSCI World Index of equities in 23 developed markets climbing 1.4 percent. The Standard & Poor’s 500 Index gained 1.2 percent and the S&P/TSX Composite Index, Canada’s main benchmark, advanced 0.9 percent. To contact the reporter on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net

Source