Canadian Dollar Climbs to Three-Week High
The Canadian currency strengthened for the Christmas- shortened week against all 16 of its most-traded counterparts as the nation’s economy gained for a second straight quarter and retail sales increased. U.S. reports this week showed sales of existing American homes and orders for durable goods rose. The Canadian unemployment rate remained at 8.5 percent in December, a report may show on Jan. 8. The Canadian dollar has spun into life,” said Andrew Wilkinson, senior market analyst at Greenwich, Connecticut-based Interactive Brokers Group Inc. “Being America’s largest trading partner, Canada benefits from the U.S. recovery.
The beauty of this is that Canada is a resource-rich country, so investors are more willing to own the Canadian dollar than the U.S. currency. It’s a perfect storm.”The loonie, which was poised to outperform its major counterparts for the month, gained more than 2 percent this week versus the currencies of New Zealand and Australia, which like Canada export commodities.
Crude oil for February delivery climbed to $78.25 a barrel on the New York Mercantile Exchange yesterday, the highest level since Dec. 2. It increased 11 percent over the past two weeks. Copper for March delivery rose 2.8 percent this week, touching a 15-month-high of $3.3040 a pound on the New York Mercantile Exchange’s Comex unit. A Canadian commodity price index compiled by the Bank of Canada advanced more than 20 percent this year.
Raw materials generate half of Canada’s export revenue. The MSCI World Index, a measure of stocks in 23 developed markets, advanced 2.5 percent this week. The Standard & Poor’s 500 Index rose for each of the past five trading days, touching an almost 15-month high. U.S. orders for durable goods excluding transportation gained 2 percent in November, a Commerce Department report showed yesterday, almost twice as much as economists forecast. Sales of existing U.S. homes increased last month to the highest level in almost three years, the National Association of Realtors said on Dec. 22.
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