May 23 (Bloomberg) -- Canada's dollar reached a 30-year high on optimism foreign takeovers of the nation's resource- based assets will fuel currency demand.

The Canadian dollar traded at 92.36 U.S. cents at 4:45 p.m. Toronto time, down from 92.48 U.S. cents earlier in the day, the highest since Oct. 4, 1977. One U.S. dollar buys C$1.0827.

``Investors are focusing on the strong mergers and acquisitions inflows,'' said Camilla Sutton, currency strategist at Scotia Capital Inc. in Toronto. ``The currency is also getting help from a broad-based U.S. dollar weakness.''

Crude oil near contract futures, which settled at $65.77 in floor trading on the New York Mercantile Exchange, have advanced 21 percent in the last two years, while gold is 53 percent higher and copper is up 87 percent over that period. Commodities account for 54 percent of Canadian exports.

The currency strengthened on news that OAO GMK Norilsk Nickel, the world's largest producer of the metal, increased an offer for Toronto-based LionOre Mining International Ltd. by 28 percent to C$6.8 billion ($6.3 billion), trumping an improved bid from Xstrata Plc.

Canada's biggest aluminum producer was in talks with BHP Billiton Ltd. to fend off a $27.4 billion takeover bid from Alcoa Inc., The Globe and Mail newspaper reported.

Canada's largest telephone company, BCE Inc. said today it started talks to go private with Cerberus Management LP, raising prospects for a three-way bidding war.

``With commodity prices near all-time highs, it makes Canada even more attractive from a mergers and acquisitions perspective,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``Those flows, depending on the accounting, can create a demand for Canadian dollars.''

The Canadian dollar was also bolstered by gains in the euro, which rose on speculation that that the European Central Bank could lift interest rates further this year, said Jack Spitz, director of foreign exchange trading at National Bank of Canada in Toronto.

U.S. Dollar Weakness

Eleven of the 16 most-actively traded currencies advanced against the dollar today. The Canadian dollar also reached a 15- year high against the Japanese yen at 112.50 yen per Canadian dollar.

``The strength of the Canadian dollar is coming on the heels of broader dollar weakness, with the euro leading the way,'' Spitz said.

The currency has gained 7.7 percent this year against the U.S. dollar on signs that Canada's economy is strengthening.

Canada's index of leading economic indicators rose 0.4 percent in April on gains in manufacturing and higher sales of furniture and appliances, Statistics Canada said today from Ottawa.

The overall gain in April matched March's figures and the median estimate in a Bloomberg survey of 18 economists.

New factory orders rose 0.9 percent and the length of the manufacturing sector's average workweek rose 0.5 percent, Statistics Canada said today from Ottawa. Retail sales of furniture and appliance rose 0.7 percent.

The yield on Canada's benchmark 10-year bond rose 4 basis points, or 0.04 percentage point, to 4.39 percent. The price of the 4 percent bond due in June 2016 fell 29 cents to C$97.13. Bond yields move inversely to prices.

The 10-year U.S. Treasury yielded 46 basis points more than the comparable Canadian security, from 47 basis points yesterday and a 12-month low of 43 basis points on May 4.

To contact the reporters on this story: Haris Anwar in Toronto at hanwar2@bloomberg.net Kim-Mai Cutler in New York at kcutler@bloomberg.net

Last Updated: May 23, 2007 16:47 EDT