By Cordell Eddings Jan. 6 (Bloomberg) -- The Canadian currency gained for a fifth straight day, its longest winning streak since October, as copper and gold rose and crude oil, the nation’s biggest export, touched the highest level in almost 15 months. Canada’s dollar reached a two-month high before a report this week that’s forecast to show the nation’s employers added 20,000 jobs in December. Companies in the U.S. cut an estimated 84,000 positions last month, more than forecast, an industry report showed. The U.S. dollar fell as minutes of the Federal Reserve’s last meeting showed some policy makers said more stimulus “might become desirable.” “The story continues to be strength in Canada due to stronger commodities, a weaker U.S. dollar and an expected tonal shift from the Bank of Canada that will signal rate hikes before the Fed,” said Michael Gregory, a senior economist in Toronto at Bank of Montreal, the nation’s fourth largest bank. “The Fed minutes underscore that the Fed is still pretty far away from the point where it will be ready to raise rates.” The currency, nicknamed the loonie for the image of the waterfowl on the C$1 coin, appreciated 0.7 percent to C$1.0320 per U.S. dollar at 4:12 p.m. in Toronto, compared with C$1.0390 yesterday. It touched C$1.0313, the strongest level since Oct. 20. One Canadian dollar buys 96.90 U.S. cents. Government bonds fell, pushing the yield on the benchmark 10-year note up five basis points, or 0.05 percentage point, to 3.61 percent. The price of the 3.75 percent security maturing in June 2019 decreased 41 cents to C$101.07. Euro-Denominated Bonds Canada put on sale 2 billion euros ($2.9 billion) today of 3.5 percent securities maturing in January 2020. The spread was 19.4 basis points more than German governments and two basis points over mid-rate swaps. It was Canada’s first sale of debt in the European currency in more than a decade. The loonie gained versus 12 of its 16 most-traded counterparts tracked by Bloomberg as metals prices climbed. It was outperformed by currencies that included those of Australia, Norway and Mexico, which also export commodities. Raw materials including crude oil, copper and gold account for half of Canada’s export revenue. The U.S. dollar fell against 13 major currencies as minutes of the Federal Open Market Committee’s Dec. 15-16 meeting showed policy makers debated increasing and extending asset purchases should the economy weaken. The dollar declined earlier as evidence of recovery in the U.S. service industry and job market spurred demand for riskier assets. Support for Loonie “The FOMC minutes lent some support to the Canadian dollar as well,” said BMO’s Gregory. “There does seem more support on the committee for extending the asset-purchase program than people who want to shut it down because there is still concern about the economy.” The Bank of Canada is scheduled to issue its next interest- rate decision on Jan. 19. Policy makers have said they intend to keep the benchmark interest rate at a record-low 0.25 percent through June, barring a change in the outlook for inflation. The central bank will probably boost the rate to 0.75 percent in the third quarter, according to economists in a Bloomberg survey. The Fed will probably raise its benchmark rate to 0.5 percent in the same quarter, from virtually zero now, according to another survey. Crude oil for February delivery surged as much as 2.1 percent to $83.52 a barrel on the New York Mercantile Exchange, the highest price since October 2008. Copper for March delivery touched $3.522 a pound, the highest since July 2008, on the New York Mercantile Exchange’s Comex unit. Gold for immediate delivery climbed 1.8 percent to $1,138.47 an ounce. Canadian Jobs An increase in Canadian jobs in December would be the second in two months. Employers added 79,000 positions in November. Statistics Canada is scheduled to report the data for last month on Jan. 8. ADP Employer Services’s estimate today of U.S. job losses in December was the smallest since March 2008. Economists in a Bloomberg News survey forecast a reduction of 75,000 positions. A U.S. Labor Department report on Jan. 8 is forecast in another Bloomberg survey to show the economy lost no jobs last month. The Institute for Supply Management’s index of U.S. non- manufacturing businesses, which account for almost 90 percent of the nation’s economy, increased to 50.1 in December from 48.7 in the previous month, a report showed today. Readings above 50 signal growth. Canada’s economy grew for the first time in four quarters from July through September, signaling an end to its first recession since 1992, Statistics Canada reported in November. ‘Strong Fundamentals’ “The Canadian dollar has risen, holding its own against other currencies, due to strong fundamentals,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “The steady nature of its rise suggests the market believes the currency is strong fundamentally.” Canada’s currency will approach “channel support” at 1.0261 per U.S. dollar as their exchange rate moves in a so- called medium-term downtrend pattern, according to technical analysts at Royal Bank of Canada, the nation’s biggest bank. To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net

Source