Nov. 7 (Bloomberg) -- Canada’s dollar gained against its U.S. counterpart for the first week since mid-October as stocks and crude oil advanced and gold surged to a record, burnishing the appeal of higher-yielding assets.

The currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, trimmed the advance when it tumbled yesterday after a report showed Canadian employers unexpectedly eliminated jobs in October. International trade and housing data due next week may move the loonie, which has appreciated 13 percent this year.

“It was a decent week for stocks, and gold was ticking higher all week,” said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal, Canada’s fourth-largest bank. “We think the Canadian dollar will continue to do well.”

Canada’s currency strengthened 0.9 percent to C$1.0753 per U.S. dollar in Toronto, from C$1.0848 on Oct. 30. The loonie, which depreciated 1 percent yesterday, last posted a weekly gain on Oct. 16. One Canadian dollar buys 92.99 U.S. cents.

“We think these are good levels to reinitiate long positions, between here and C$1.0850.” said Jespersen, who predicts the loonie will reach parity with the U.S. dollar by April 2010. A long position is a bet a currency will gain.

The nation’s trade deficit narrowed in September to C$1.7 billion from C$2 billion the previous month, according to the median forecast of 17 economists in a Bloomberg survey. Statistics Canada will report the data on Nov. 13. Housing starts rose to a seasonally adjusted 159,300 last month, from 150,000 the previous month, according to another survey before a report due Nov. 9.

Stocks, Gold

The Standard & Poor’s 500 Index rose 3.2 percent this week, bringing its gain since a 12-year low in March to 58 percent.

Gold futures for December jumped to a record $1,101.90 an ounce in New York on speculation that low U.S. borrowing costs will drive down the American currency, boosting the appeal of the precious metal as an alternative investment.

The greenback fell this week against all of the 16 most- traded currencies tracked by Bloomberg except the Mexican peso. South Africa’s rand was the best performer.

The Federal Reserve said on Nov. 4 that U.S. interest rates will stay “exceptionally low” for an “extended period,” increasing the appeal of riskier assets such as currencies linked to growth. It held the benchmark rate at a range of zero to 0.25 percent.

Crude oil for December delivery gained 0.6 percent for the week to $77.43 a barrel in New York. The commodity is Canada’s biggest export, and raw materials including it and gold generate more than half of the nation’s export revenue.

‘Not Quite as Bad’

The nation’s unemployment rate rose last month to 8.6 percent from 8.4 percent in September as employers eliminated a net 43,200 jobs, Statistics Canada said yesterday in Ottawa. Payrolls lost 59,700 part-time jobs while gaining 16,500 full- time positions, the agency said.

“The number was not quite as bad as the headlines might suggest,” said David Love, a Montreal-based trader of interest- rate derivatives at brokerage Le Group Jitney Inc. “All of the losses were part time.”

The median estimate in a Bloomberg survey of 22 economists was for Canadian payrolls to gain 10,000 positions. The jobless rate in the U.S., Canada’s biggest trade partner, rose to 10.2 percent as American employers cut 190,000 jobs, more than the 175,000 forecast in another survey, a Labor Department report showed yesterday in Washington.

The data may make it easier for the Bank of Canada to fulfill its pledge to keep its benchmark lending rate at a record low 0.25 percent until June 2010 to spur growth, barring a change in the inflation outlook.

Canadian government bonds fell this week, with the 10-year note yield increasing 10 basis points, or 0.10 percentage point, to 3.52 percent. The price of the 3.75 percent security due in June 2019 dropped 84 cents to C$101.83.

The nation’s government securities lost investors 1.6 percent this year, according to a Merrill Lynch index.

To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Last Updated: November 7, 2009 00:01 EST