Canadian Dollar Rallies as Oil Price Climbs After ECB Commentsby
Loonie rises most in 10 months after reaching 12-year low
ECB open to further easing sparks gains in stock prices
The Canadian dollar strengthened the most in 10 months as crude-oil prices rose following signals the European Central Bank may take further measures to stimulate that region’s economy.
The currency rose for a second day after snapping its longest-ever 13-day losing streak. Oil climbed above $30 a barrel and equity markets jumped after ECB President Mario Draghi said global economic risks have escalated and the central bank will consider additional monetary stimulus in March.
"More ECB easing has helped to prop up European risk assets and that has a spillover effect on to the high-beta commodity currencies," said Mazen Issa, senior foreign-exchange strategist at Toronto-Dominion Bank in New York. "The risks tilt to the downside the longer that oil prices remain at these levels."
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, gained 1.6 percent to C$1.4266 per U.S. dollar, as of 5 p.m. in Toronto. It gained the most on a closing basis since March 18, 2015. One loonie buys 70.10 U.S. cents.