May 5 (Bloomberg) -- Canada’s dollar touched the highest since November as investors sought riskier assets including commodity-linked currencies.

“The market is now willing to embrace risk and move clean of the safety associated with the U.S. dollar,” said Stewart Hall, an economist in Toronto at HSBC Securities. “The Canadian dollar has the potential to be a high-yielding currency if the commodity story once again gains traction and moves forward.”

The Canadian currency, known as the loonie for the aquatic bird on the one-dollar coin, touched C$1.1679, the strongest level since Nov. 10. It was little changed at C$1.1723 per U.S. dollar at 10:02 a.m. in Toronto, from C$1.1724 yesterday. One Canadian dollar buys 85.30 U.S. cents.

“The Canadian dollar could reach the November low of C$1.1465 in the next few days,” said Fabien Manac’h, a technical analyst at Societe Generale SA in Paris. “There’s a high risk of such a move. We think there is still some room to the downside for the U.S. dollar.”

Movements in the relative strength index, a momentum indicator, “confirm the bearish signal,” Manac’h said.

The Standard & Poor’s 500 Index rose 3.4 percent yesterday, capping an eight-week rally that erased this year’s 25 percent decline. The gauge was down 0.1 percent today.

Crude oil for June delivery rose as much as 36 cents, or 0.7 percent, to $54.83 a barrel in electronic trading on the New York Mercantile Exchange. Oil is up 21 percent this year.

Commodities including oil accounted for 56 percent of Canada’s export revenue last year, according to the nation’s statistics office.

“The Canadian dollar, as well as the Australian dollar and the New Zealand dollar, are surging on stronger equities and more buoyant commodity prices,” Sacha Tihanyi, a currency strategist in Toronto at Scotia Capital Inc., a unit of Canada’s third-biggest bank, wrote in a note to clients today. “The foreign-exchange market is pricing in the hope that equities have it right.”

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

Last Updated: May 5, 2009 10:11 EDT