Canada’s dollar gained to the strongest level in two weeks versus its U.S. counterpart, outperforming the currencies of other commodity-exporting countries as oil traded at almost a two-year high. Canada’s currency rose against the euro after Ireland’s credit rating was cut by Standard & Poor’s, renewing concern that Europe’s sovereign-debt crisis may worsen. Oil, Canada’s biggest export, traded above $90 per barrel for the third day. “With what’s going on with oil, that’s definitely helping out here,” said C.J. Gavsie, managing director for foreign exchange trading in Toronto at Bank of Montreal’s BMO Capital Markets unit. “To see a little bit of a catch-up on the Canadian dollar side was in the cards.” The Canadian dollar gained 0.3 percent to 98.79 cents per U.S. dollar at 5 p.m. in New York, after touching 98.61, the strongest since Jan. 18. One Canadian dollar buys $1.0117. Canada’s dollar pared its earlier gain as a surge in Treasury yields boosted demand for the greenback. Two-year note yields reached 0.67 percent, the highest level since Jan. 7. Crude oil futures rose as much as 1.1 percent to $91.78 a barrel. The Canadian dollar also rose after companies in the U.S. added 187,000 workers in January following a revised 247,000 gain in December, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 140,000 increase. “Anything that indicates that U.S. growth is stronger than expected is positive for the Canadian growth outlook,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. Jobs Data Both the U.S. and Canada will report January unemployment Feb. 4. Canada added 15,000 jobs in the month after a 30,400 gain in December, according to the median estimate in a Bloomberg News survey of 26 economists. The loonie, as Canada’s currency is known for the image of the waterfowl on the C$1 coin, has traded above parity with its U.S. counterpart every day this year, the longest such period since December 2007. Prime Minister Stephen Harper will visit President Barack Obama in Washington Feb. 4, amid speculation the two leaders will sign a security and trade deal designed to speed the flow of goods and people across the border. Canadian businesses need to get used to the nation’s currency trading at parity with its U.S. counterpart, according to Edmund Clark, chief executive officer of Toronto-Dominion Bank, the nation’s second-largest lender. ‘Upward Pressure’ “That’s certainly the feeling,” Clark said in an interview at Bloomberg offices in New York yesterday. “As long as Asia is growing at the rate it is, you’re going to have upward pressure on commodities and that’s going to drive the Canadian currency.” Bank of Canada Governor Mark Carney, who has kept the overnight lending rate unchanged at 1 percent since boosting it for the third consecutive meeting in September, said the currency’s appreciation has threatened growth. “One of the risks to the Canadian economy is persistent strength to the Canadian dollar,” Carney said in a Bloomberg Television interview at the World Economic Forum’s meeting in Davos, Switzerland, last week. Canada’s currency outperformed those of other commodity- exporting countries, such as Australia, after gaining less than its peers yesterday. The loonie gained 0.5 percent today in a basket of 10- developed nation currencies, according to Bloomberg Correlation- Weighted Currency Indexes. Australia’s dollar rose 0.1 percent and Norway’s krone was little changed. The Canadian dollar yesterday added 0.1 percent while the Aussie rose 0.5 percent. Bonds Fall Government bonds fell, pushing the yield on Canada’s benchmark 10-year note up as much as six basis points to 3.40 percent, the highest level since June. It later traded at 3.38 percent, up four basis points. A basis point is 0.01 percentage point. The price of 3.5 percent security due in June 2020 dropped 28 cents to C$100.99. The Bank of Canada sold C$3 billion ($3 billion) of 10-year notes at an average yield of 3.482 percent. The 3.25 percent securities mature in June 2021, according to the BOC website. To contact the reporter for this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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