Nov. 23 (Bloomberg) -- Canada’s currency appreciated the most in two weeks against its U.S. counterpart as gold and crude oil gained, burnishing the appeal of currencies tied to commodity prices.

“Traders are definitely willing to put risk on their books again,” said John Curran, a Toronto-based senior vice president at CanadianForex Ltd., an online foreign-exchange dealer. “The longer-term bias for players is still definitely to sell U.S. dollars.”

The Canadian currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, advanced 1.4 percent to C$1.0563 per U.S. dollar at 4:31 p.m. in Toronto, from C$1.0706 on Nov. 20. It strengthened as much as 1.6 percent, the most on an intraday basis since Nov. 9, and headed for a 2.7 percent gain for the month. One Canadian dollar buys 94.67 U.S. cents.

The loonie, up 15 percent this year on a rebound in commodity prices, will strengthen to C$1.03 by the end of the first quarter of 2010, according to the median forecast of 37 economists and analysts surveyed by Bloomberg News. Raw materials account for more than half Canada’s export revenue.

The U.S. dollar “might still be a little bit vulnerable to the downside,” said George Davis, chief technical analyst for fixed-income and currency strategy in Toronto at Royal Bank of Canada, the nation’s biggest lender. “A lot of it will depend on how the equity markets do.”

The greenback fell today against all 16 of its most-traded counterparts tracked by Bloomberg except the yen. Canada’s dollar was the second-best performer behind the currency of fellow commodity exporter South Africa.

‘Got Things Going’

Gold jumped to a record as a slumping dollar boosted bullion’s appeal as an alternative asset. December gold futures rose as much as 2.4 percent to $1,174 an ounce in New York.

“The overnight spike in gold prices really got things going,” RBC’s Davis said. “The U.S. dollar got sold across the board against all the major currencies, then it became a type of position-squaring exercise.”

Crude oil for December delivery surged as much as 4.2 percent before trading up 1.2 percent to $77.62 a barrel on the New York Mercantile Exchange. Crude, Canada’s largest export, gained 74 percent this year.

The Standard & Poor’s 500 Index gained 1.4 percent amid analysts’ upgrades of companies such as oilfield services firm Schlumberger Ltd. and Deere & Co., the largest maker of agricultural equipment. The MSCI World Index, a gauge of equities in 23 developed nations climbed 1.7 percent.

Retail Sales Up

Canadian retail sales rose 1 percent in September to C$34.9 billion ($33 billion), led by automotive, food and general merchandise shops, Statistics Canada said today in Ottawa. Economists expected a 0.6 percent increase, based on the median of 20 estimates compiled by Bloomberg.

Canada’s 10-year bond yielded 2.12 percentage points more than its two-year security, near the most since Sept. 23. The so-called yield curve touched 2.30 percentage points on May 27, the steepest since January 2002.

Government bonds were little changed, with the benchmark 10-year note’s yield falling one basis point, or 0.01 percentage point, to 3.37 percent. The price of the 3.75 percent security maturing in June 2019 rose 10 cents to C$103.10.

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

Last Updated: November 23, 2009 16:35 EST