BLBG: Canadian Dollar Trades Near Year High as Stocks, Oil Fluctuate
Oct. 7 (Bloomberg) -- Canada’s dollar traded near the strongest level in more than a year as crude oil, the nation’s biggest export, and stocks swung between gains and losses.
The Canadian currency climbed over the past three days, gaining 1 percent yesterday as commodities and equities rallied and an interest-rate boost by the Reserve Bank of Australia raised speculation of increases by other central banks. The U.S. dollar, which fell yesterday against 15 of the 16 most-traded currencies tracked by Bloomberg, rose against 13 of them today.
“High-yielding currencies are backtracking,” said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. “We have come a long, long way. There are some signs that the moves look quite extended.”
The Canadian dollar, nicknamed the loonie, was little changed at C$1.0604 per U.S. dollar at 11:33 a.m. in Toronto, from C$1.0594 yesterday. It earlier touched C$1.0529, the strongest since Sept. 30, 2008. One Canadian dollar buys 94.30 U.S. cents.
The loonie gained 15 percent against the dollar this year and was the best-performing major currency against the greenback last week.
The U.S. dollar became attractive to Canadian companies that export goods to the U.S. when the loonie rose as high as 94.98 U.S. cents today, said John Curran, a Toronto-based senior vice president at CanadianForex Ltd., an online foreign- exchange dealer.
‘Psychological Level’
“Ninety-five cents is a bit of psychological level for many of the hedgers,” Curran said. “Many of the exporters have priced the Canadian dollar at much lower levels into their products, and this is a great opportunity for them.”
The greenback “could see a corrective bounce” against the loonie, but any gains should be followed by longer-term selling of dollars, Jonathan Gencher, Toronto-based director of foreign- exchange sales at BMO Capital, wrote today in a note to clients.
The Standard & Poor’s 500 Index and the MSCI World Index, a measure of stocks in 23 developed markets, were little changed after each dropped as much as 0.4 percent.
Crude oil for November delivery rose 0.1 percent to $70.94 a barrel on the New York Mercantile Exchange after falling as much as 0.8 percent. Crude is Canada’s biggest export.
The Bank of Canada is scheduled to auction at noon today C$3.5 billion ($3.3 billion) of 1.25 percent securities due in December 2011. Results will be posted on the central bank’s Web site by 12:05 p.m.
To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net
