Canada's Dollar Gains After Report Shows Manufacturing Increase

By Chris Fournier

Aug. 15 (Bloomberg) -- Canada's dollar rose after a government report showed manufacturing shipments in the world's eighth-largest economy advanced more than forecast.

The Canadian dollar is poised for its biggest weekly gain in more than a month. It has strengthened 0.6 percent versus its U.S. counterpart since Aug. 8. Canada's dollar appreciated today versus the 16 most-actively traded currencies.

``It's an economic data story today,'' said Eric Lascelles, chief economist at TD Securities Inc. in Toronto. ``It was a broadly-based gain, and I think it is eliminating some of the pessimism that surrounds Canada, and is perhaps helping the Canadian dollar recoup some of its recent losses.''

The currency increased 0.3 percent to C$1.0607 per U.S. dollar at 9:22 a.m. in Toronto, from C$1.0636 yesterday. It fell to as low as C$1.0728 on Aug. 12, the weakest since Aug. 17, 2007. One Canadian dollar buys 94.28 U.S. cents.

Factory shipments increased 2.1 percent in June, after a revised 2.2 percent gain during the previous month that was less than originally reported, Statistics Canada said in Ottawa. Economists surveyed by Bloomberg predicted a 1 percent gain, the median of 21 forecasts.

Lascelles predicts the Canadian dollar will trade at C$1.10 by year-end.

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