By Chris Fournier Jan. 11 (Bloomberg) -- Canada’s dollar appreciated to the strongest in almost three months as commodities, which account for half the nation’s export revenue, rose and the U.S. dollar dropped against all of its major counterparts. “Sentiment is very bullish on the Canadian dollar,” said Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia, Canada’s third-largest lender. “The stars have aligned, with oil at a new high, the U.S. dollar broadly weaker and the relative fundamental picture in Canada supportive of a strong currency.” The Canadian currency advanced as much as 0.4 percent to C$1.0253 per U.S. dollar, the strongest level since Oct. 15, and traded at C$1.0272 at 8:24 a.m. in Toronto, from C$1.0298 on Jan. 8. One Canadian dollar buys 97.35 U.S. cents. Housing starts in December rose to 174,500 the highest since October 2008, Canada Mortgage and Housing Corp. reported today in Ottawa. The median of 18 forecasts in a Bloomberg survey was for starts to rise by 160,300. Crude oil, Canada’s largest export, climbed to the highest level in 15 months as cold weather stoked demand and the slide in the U.S. dollar heightened the commodity’s appeal as an inflation hedge. Crude for February delivery climbed as much as 1.5 percent to $83.95 a barrel in electronic trading on the New York Mercantile Exchange. The Canadian and Australian dollars will strengthen to trade at parity with the greenback or better together in 2010 for the first time in 34 years, appreciating at least 2.6 percent and 7.4 percent, three of last year’s four best forecasters for both currencies said. National Australia, Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. predict parity by June 30; the fourth of the best forecasters, Canadian Imperial Bank of Commerce, sees it there by Dec. 31. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Source