By Chris Fournier Dec. 16 (Bloomberg) -- Canada’s dollar gained against its U.S. counterpart as oil and global stocks rose amid speculation the Federal Reserve will hold its benchmark interest rate at a record low to help sustain the global economic recovery. The Canadian currency has fallen 0.2 percent in December after rising 2.7 percent last month. The greenback dropped today against 11 of its 16 most-traded counterparts tracked by Bloomberg before the Federal Open Market Committee issues its rate decision and statement around 2:15 p.m. New York time. “We’re seeing a good jump in crude and commodities in general as well as equities,’’ said Michael Leavitt, a Montreal- based institutional-derivatives broker at MF Global Canada Co., citing reasons for the higher Canadian dollar. “The FOMC is the main event today.’’ The Canadian dollar appreciated 0.2 percent to C$1.0593 per U.S. dollar at 10:59 a.m. in Toronto, from C$1.0612 yesterday. It has traded in a range of C$1.0671 to C$1.0406 this month. One Canadian dollar buys 94.41 U.S. cents. Crude oil for January delivery climbed 2.8 percent to $72.69 a barrel on the New York Mercantile Exchange. The commodity, which has gained 60 percent this year, fell two days ago to the lowest level since Oct. 5, $68.59 a barrel. Crude is Canada’s biggest export. The Standard & Poor’s 500 Index rose 0.6 percent, and the MSCI World Index, a benchmark of stocks in 23 developed markets, gained 0.8 percent. The Canadian dollar tends to track changes in stocks and commodity prices. U.S. Target Rate Canada’s currency, nicknamed the loonie for the image of the water fowl on the C$1 coin, gained against nine of the 16 most-traded currencies tracked by Bloomberg. U.S. policy makers will hold the target rate for overnight loans between banks at a range of zero to 0.25 percent today, all 98 economists in a Bloomberg News survey forecast. The Fed said at its last meeting it intended to keep it near zero for an “extended period.” “There’s a risk they could toy with the ‘extended period’ language, or announce more comprehensive measures to withdraw liquidity in 2010,” said Stephen Gallo, head of market analysis in London at Schneider Foreign Exchange. “Odds are tipped to it not being a massive event either way.” Canadian factory sales rose 2 percent in October from a month earlier to C$42.5 billion ($40.1 billion), twice as fast as forecast, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg predicted a 1 percent gain, the median of 18 estimates. Consumer Prices Consumer prices increased 0.8 percent in November from a year earlier, the statistics agency will report tomorrow, according to the median estimate in another Bloomberg survey. The loonie has gained 15 percent this year for the sixth- best performance versus the greenback among its 16 most-traded counterparts, behind the currencies of Brazil, Australia, South Africa, New Zealand and Norway. All six rely on commodities for export revenue. “If you want to go long U.S. dollars, you want to do it against the euro,” said John Curran, a Toronto-based senior vice president at CanadianForex Ltd., an online foreign-exchange dealer. “Canada, Aussie, kiwi, Norway -- those are going to be the last ones; they’re still favored for the commodity trade.” A long position is a bet a currency will appreciate. Bank of Canada Governor Mark Carney is scheduled to speak at 11:45 a.m. in Toronto. The Bank of Canada’s next decision on interest rates is Jan. 19. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Source