Canadian Dollar Touches Strongest Level Since October Before Growth Data
Canada’s dollar rose to a three- month high before a report today that economists predict will show the nation’s economy expanded in November.
The currency is up 2.5 percent in the past three months against nine major peers in Bloomberg Correlation Weighted Indexes. It rose today as Greece said progress was being made in debt-swap talks with creditors, increasing demand for currencies of nations with higher-yielding assets.
“There’s a risk rally and the Canadian dollar is participating,” said Firas Askari, head of currency trading at Bank of Montreal’s BMO Capital Markets in Toronto, in an e-mail message. “This will be a choppy market, and the euphoria of Europe agreeing will wear off.” BMO predicted the currency will weaken to C$1.05 by the end of March versus the greenback.
The currency, nicknamed the loonie, climbed 0.4 percent to 99.71 Canadian cents per U.S. dollar at 7:41 a.m. Toronto time. It touched 99.67 cents, the strongest level since Oct. 31. One Canadian dollar buys $1.0029.
Canada’s economy expanded 0.2 percent in November, according to the median forecast of 23 economists in a Bloomberg survey. Statistics Canada is due to release the data at 8:30 a.m. in Ottawa.
The numbers will matter “just near term and only if it’s an outlier,” Askari said. He predicted the Canadian currency will trade in a range of 99.50 cents to C$1.0350.
The U.S. dollar dropped as stocks and commodity prices rose. Greek Prime Minister Lucas Papademos said progress had been made in debt-swap talks with bondholders and European chiefs meeting in Brussels yesterday agreed to accelerate the introduction of a permanent 500 billion-euro ($659 billion) rescue fund and signed a deficit-control treaty.
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