Canada’s dollar reached a seven-week high as crude oil, the nation’s largest export, gained, burnishing the appeal of currencies tied to growth. The Canadian dollar, nicknamed the loonie for the image of the waterfowl on the C$1 coin, rose for a seventh day, the longest streak since July 2009. “There is already quite a bullish outlook priced in” to the Canadian dollar, said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “We need to continue to see strong data in order to fulfill those expectations. The risk- reward is slightly skewed to the downside.” Canada’s currency rose as much as 0.4 percent to C$1.0251, the strongest since Jan. 19, before trading at C$1.0276 at 4:40 p.m. in Toronto. One Canadian dollar buys 97.31 U.S. cents. The Standard & Poor’s 500 Index lost less than 0.1 percent after earlier rising as much as 0.2 percent and declining as much as 0.2 percent. Crude oil for April delivery rose 0.3 percent to $81.72. The Canadian dollar tends to follow movements in equities and oil. The 30-day correlation between the currency and crude is 0.60, and its correlation with the S&P 500 is 0.74. A reading of 1 would indicate they move in lockstep. Government Bonds Government bonds fell, pushing the yield on the two-year security higher by three basis points, or 0.03 percentage point, to 1.54 percent. The price of the 1.5 percent security due in March 2012 fell 5 cents to C$99.93. Canada’s dollar has climbed 4.7 percent in the past month for the fifth-best performance among the U.S. dollar’s 16 most- traded counterparts. The Australian dollar is the biggest gainer at 5.2 percent. The U.S. dollar fell against 12 of its 16 most-traded counterparts. The yen, euro and pound dropped the most versus the greenback. “Daily indicators are still oversold but expect further grinding to the downside as market sentiment is firmly Canadian- dollar positive,” John Curran, a Toronto-based senior vice president at CanadianForex Ltd., an online foreign-exchange dealer, wrote in a note to clients today, meaning the U.S. dollar may continue to drop against the Canadian dollar. The Australian dollar is being overtaken by the Canadian dollar among commodity currencies as the safety of Canada’s banking system and ties with the U.S. economy spur investors to buy the loonie. Lending Rates Options show demand for the right to sell the so-called Aussie and buy the Canadian dollar reached the highest last month in almost a year. A measure of traders’ expectations for price fluctuations indicates the loonie is the most secure bet relative to the Australian dollar since July as the global recovery shows signs of wavering. Canada’s central bank will lift its target lending rate 50 basis points in June as the nation’s economy recovers, Sophia Drossos, co-head of global foreign-exchange strategy at Morgan Stanley in New York, said in a Bloomberg Radio interview. The Bank of Canada signaled higher borrowing costs in coming months when it said on March 2 that inflation and economic output have been higher than it had expected. Housing starts in Canada rose to a seasonally adjusted annual pace of 196,700 last month from a revised 185,400 units in January, Canada Mortgage and Housing Corp. said in a statement. Economists anticipated the February pace of starts would be 190,000 units, according to the median of 19 responses in a Bloomberg survey.

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