BLBG: Canadian Currency Advances After Report Shows U.S. Sales Gained
By Chris Fournier
Sept. 15 (Bloomberg) -- Canada’s dollar strengthened after erasing earlier losses as a report showed U.S. retail sales surged in August by the most in three years, boosting investor appetite for higher-yielding currencies.
“You had strong U.S. numbers,” said Jonathan Gencher, Toronto-based director of foreign-exchange sales at BMO Capital, a unit of Canada’s fourth-largest bank. “You’re seeing risk appetite increasing, and the Canadian dollar is benefiting.”
The currency appreciated 0.6 percent to C$1.0758 per U.S. dollar at 12:30 p.m. in Toronto, from C$1.0827 yesterday, when it touched C$1.0926, the weakest level since Sept. 4. One Canadian dollar buys 92.95 U.S. cents.
Canada’s economy is supported by rising commodity prices, business and consumer confidence and “aggressive monetary policy easing,” Bank of Canada Deputy Governor John Murray said, according to a presentation he is giving in Berlin today.
“You’re hearing Murray reiterate the usual, but everything else he’s saying is mildly optimistic,” said Gencher, who added that corporate buying is also boosting the Canadian dollar.
The loonie, as the currency is nicknamed, hovered between C$1.1125 and C$1.0633 since the end of July. It fell as much as 0.4 percent today before reversing after a government report showed U.S. retail sales increased by the most in three years.
A weekly close stronger than C$1.07 “is needed to reignite the enthusiasm of Canadian dollar buyers,” Shane Enright, currency strategist in Toronto at CIBC World Markets Inc., wrote in a note today. Positive investor sentiment and the greenback’s inability to break through technical barriers means the Canadian dollar could trade higher, Enright wrote.
Crude, Stocks
The Standard & Poor’s 500 Index, a benchmark for U.S. stocks, was little changed today after gaining as much as 0.2 percent to reach a 2009 high.
Crude oil for October delivery rose 0.8 percent to $69.43 a barrel on the New York Mercantile Exchange. It earlier topped $70 a barrel and is up 55 percent this year.
The two-year government bond’s yield fell two basis points, or 0.02 percentage point, to 1.24 percent. The 1 percent security due in September 2011 fell 3 cents to C$99.54.
The 10-year’s yield rose one basis point to 3.38 percent.
