June 7 (Bloomberg) -- Canada’s dollar rose for the first time in three days after a report showed last week stronger-than-forecast growth in the nation’s employment, bolstering the appeal of its currency as a haven.
Canada’s dollar, known as the loonie, gained even as crude oil, the nation’s biggest export, declined. The Standard & Poor’s/TSX Composite Index of Canadian stocks rose as much as 0.4 percent before losing 0.6 percent. The loonie has climbed 10.8 percent this year versus its developed-world counterparts, Bloomberg Correlation-Weighted Indexes show, the third-best performance after the yen and the U.S. dollar.
“Canada continues to trade on better fundamentals,” said Jack Spitz, managing director of foreign exchange in Toronto at National Bank of Canada. “Based on the jobs numbers that were produced last Friday and the TSX today, it continues to perform quite well.”
The Canadian currency rose 0.3 percent to C$1.0599 at 4:26 p.m. in Toronto, compared with C$1.0629 on June 4. One Canadian dollar buys 94.35 U.S. cents.
Canadian employers added 24,700 jobs in May, according to a report on June 4, topping the 15,000 median forecast in a Bloomberg News survey for the fifth straight monthly gain. Last month’s jobs gain follows a record 108,700 jump in April. The nation’s economy expanded 6.1 percent in the first quarter, the fastest pace in a decade, a report in May showed.
“There’s an underlying strength in the Canadian dollar, reinforced by domestic numbers,” Michael Leavitt, a Montreal-based institutional-derivatives broker at MF Global Holdings Ltd., said by e-mail. That will “come back to help the Canadian dollar once headlines subside.”
The loonie, which traded stronger than parity with the greenback in April, lost 2.6 percent in May as Europe’s sovereign-debt crisis drove investors toward the perceived safety of the U.S. dollar and the yen. Canada’s dollar could return to parity if markets stabilize, Spitz said.
“A move to parity could easily be in the cards, given the Bank of Canada’s position with interest rates,” he said.
The nation’s central bank on June 1 raised its target interest rate to 0.50 percent from a record low 0.25 percent, the first Group of Seven country to do so since last year’s global recession.
Canada will auction C$3.5 billion of 5-year bonds on June 9, according to a statement on the Bank of Canada’s website last week. The 3 percent securities mature in December 2015.
The benchmark government five-year bond was little changed. The yield rose 1 basis point, or 0.01 percentage point, to 2.57 percent. The price of the 2.5 percent security due in June 2015 fell 6 cents to C$99.67.
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