The Canadian currency gained, approaching the strongest level against the U.S. dollar since October, as a rally in crude oil spurred demand for assets that historically benefit when the global economy expands.
Canada's dollar advanced against most of its 16 major counterparts as oil, the nation's biggest export, traded above US$81 a barrel for the first time since November. The greenback fell against all of them. The loonie gained the most last year since 2007 as commodities increased.
"Cyclically speaking the Canadian dollar definitely stands to benefit as we move through this recovery," said Sacha Tihanyi, a strategist in Toronto at Bank of Nova Scotia, Canada's third-largest lender. "If you have a constructive view on global growth you have to be fairly confident about capital preservation in hard commodities such as oil."
The Canadian currency appreciated 1.2% to C$1.0399 per U.S. dollar at 9:59 a.m. in Toronto, from C$1.0532 on Dec. 31. It touched $1.0372, near the C$1.0367 it reached on Dec. 29, the strongest level in more than two months. One Canadian dollar purchases 96.16 U.S. cents.
Government bonds were little changed, with Canada's benchmark 10-year security yielding 3.61%. The price of the 3.75% note due in June 2019 fell 2 cents to C$101.10.
The loonie was the third-best performer against the greenback after the Swedish krona and the krone of Norway, also an oil producer. The Australian and New Zealand dollars lagged behind the gains in Canada's currency, advancing 1.1% and 0.9% respectively.
Crude oil for February delivery rose as much as 2.9% to US$81.68 a barrel in electronic trading on the New York Mercantile Exchange before trading at US$81.41.
Copper climbed to a 16-month high as a strike began at the world's second-biggest mine, Codelco's Chuquicamata facility in northern Chile, and a purchasing managers' index showed Chinese manufacturing expanded last month by the most in five years.
The price of copper for March delivery gained 2% to $3.412 a pound on the New York Mercantile Exchange's Comex unit after touching $3.429, the highest price since August 2008. Gold for immediate delivery rose 2.4% to US$1,123.20 an ounce.
Raw materials including crude, copper and gold account for half of Canada's export revenue.
stocks rose, with the MSCI World Index of equities in 23 developed
markets climbing 1.4%. The Standard & Poor's 500 Index gained 1.2%
and the S&P/TSX Composite Index, Canada's main benchmark, advanced