Canadian Currency Snaps Four Days of Losses on Commodities BidCecile Gutscher
Canada’s dollar snapped four days of losses on speculation tensions in Syria will drag on, creating demand for the currencies of commodities-exporting nations.
The Canadian currency rose against 14 of its 16 most-traded peers after U.S. President Barack Obama decided to seek authorization from Congress before ordering a strike against Syria for the alleged use of chemical weapons. Futures on crude oil, Canada’s largest export, gained as much as 1.2 percent.
“The situation in Syria is going to take a lot longer than people thought so commodity prices are likely to stay elevated a lot longer than people thought,” Greg Anderson, the head of global foreign-exchange strategy at Bank of Montreal, said in a phone interview from Toronto. “Commodity currencies have become a lot more attractive.”
The loonie, as the Canadian dollar is nicknamed for the image of a waterfowl on the C$1 coin, gained 0.3 percent to C$1.0513 per U.S. dollar at 8:31 a.m., after dropping 0.4 percent last week, its third straight weekly decline. One loonie purchases 95.12 U.S. cents.
Bets by futures traders the Canadian dollar will weaken versus its U.S. peer outnumbered those it will gain by the most in 10 weeks, data from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a decline in the Canadian dollar compared with those on a gain -- so-called net shorts -- was 24,959 in the week ended Aug. 27, the most since June 21.