Canada’s dollar headed for its biggest weekly gain against its U.S. counterpart in a month as crude oil, the nation’s biggest export, traded near a two-week high on concern fighting in Libya will further disrupt supply.

The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, rose today against the Swiss franc on bets the global economic recovery will withstand Europe’s sovereign-debt crisis and Japan’s worst earthquake on record. Opposition lawmakers were poised to topple Canadian Prime Minister Stephen Harper’s government.

“Oil prices and its developments in the Middle East continue to be the key driver for the Canadian dollar in the near term,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto.

Canada’s currency traded little changed at 97.55 cents per U.S. dollar at 9:48 a.m. in Toronto, compared with 97.52 cents yesterday. It earlier gained as much as 0.1 percent and fell as much as 0.2 percent. One Canadian dollar buys $1.0251.

The loonie has appreciated 0.8 percent this week in what would be the biggest gain since climbing 1 percent during the five days ended Feb. 25.

Crude oil for May delivery in New York advanced as much as 0.3 percent to $105.88 a barrel before trading at $104.70. It increased yesterday to $106.69 a barrel, the highest level since March 7. The commodity is headed for its first five-day advance in three weeks.

Tax Cuts

Canada’s opposition lawmakers, who collectively hold a majority of the seats in the House of Commons, may form an alliance to reverse Harper’s corporate tax cuts and overturn plans for more military spending.

Lawmakers from the opposition Liberals, New Democrats and Bloc Quebecois say they will pass a motion of no confidence in the government today, which under Canadian parliamentary tradition leads to the dissolution of the legislature. The vote is scheduled to take place about 1:30 p.m. New York time.

While polls show the governing Conservatives would likely win the most seats in an election, the main opposition Liberal Party may seek to form an alliance or formal coalition to govern if Harper, 51, doesn’t win a majority, said Nelson Wiseman, a political scientist at the University of Toronto.

Source: Bloomberg

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