Canada’s dollar rose for a fourth day, the longest winning streak in more than a month, as gains in commodities and stocks made currencies related to economic growth more attractive.


The Canadian currency extended this month’s increase to 2.1 percent versus the U.S. dollar, which has fallen against all of its major counterparts except the yen. The Australian and New Zealand dollars outperformed the loonie today after China refrained from increasing borrowing costs.

“With China not raising rates this weekend, people could be breathing a bit of a sigh of relief and putting some risk back on," Brian Kim", a currency strategist at UBS AG in Stamford, Connecticut, wrote via e-mail. “If the U.S. session carries over the momentum from Europe, we could see the Canadian dollar push higher.”

The Canadian currency, nicknamed the loonie, appreciated 0.4 percent to C$1.0051 per U.S. dollar at 10:03 a.m. in Toronto, from C$1.0091 on Dec. 10. One Canadian dollar buys 99.49 U.S. cents. The currency’s stretch of daily gains was the longest since the seven days ended Nov. 5.

Consumer prices in China rose in November more than forecast, increasing 5.1 percent from a year earlier, statistics showed over the weekend. The Chinese central bank refrained from raising borrowing costs, as some analysts forecast. China ordered lenders to park more money with the central bank to counter the inflation threat.

‘Main Drivers’

“The main drivers for modest Canadian dollar strength today are commodity prices higher and no rate hike by China,”Blake Jespersen,", director of foreign exchange in Toronto at Bank of Montreal, said via e-mail. “There’s still very good corporate demand for the U.S. dollar, all the way down to par,” he said, referring to when the Canadian dollar trades on a one- for-one basis with the greenback.

The Reuters/Jefferies CRB Index of raw materials  rose 1.2 percent. The MSCI World Index of stocks gained 0.6 percent, while the Standard & Poor’s 500 Index increased 0.2 percent.

The amount of Canadian industrial companies’ plant capacity in use increased to 78.1 percent in the July-September period, from a revised 76.9 percent in the previous quarter, Statistics Canada said today in Ottawa. Economists in a Bloomberg survey predicted the rate would be 76.5 percent, based on the median of 14 estimates.

Government bonds fell, pushing the five-year note’s yield higher by three basis points, or 0.03 percentage point, to 2.58 percent. It reached 2.612 percent, the strongest since June 23. The price of the 3 percent security maturing in December 2015 dropped 14 cents to C$101.93.

Source: Bloomberg

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