Canadian Dollar Rises For First Time in Six Days as Oil Gains

By Cordell Eddings

Aug. 7 (Bloomberg) -- Canada's dollar rose for the first time in six days as the price of crude oil climbed and the U.S. currency weakened.

The dollar has traded near a year low as economic growth slows and gold and oil drop from record highs. Commodities account for about half of the nation's exports, while the U.S. is Canada's biggest trading partner.

The dollar rose 0.2 percent to C$1.0469 per U.S. dollar at 8:26 a.m. in Toronto, from $1.0492 yesterday. One Canadian dollar buys 95.51 U.S. cents.

``Oil is up, so Canadian dollar has responded, reversing what had been a persistent and unusual trend,'' said Eric Lascelles, chief economist at TD Securities Inc. in Toronto. ``It may hold onto its gains, but it probably will continue to be soft as commodities have probably flattened a bit and the U.S. dollar has managed to hang on, and even make some gains against Canada and other currencies.''

Crude oil for September delivery rose as much as $1.80, or 1.5 percent, to $120.38 a barrel on the New York Mercantile Exchange.

The currency has traded near parity with its U.S. counterpart since September. It touched a 2008 low of C$1.0495 on Aug. 6, and a high of 97.12 cents per U.S. dollar on Feb. 28.

The Canadian dollar will weaken to C$1.05 in the first quarter of 2009, according to the median estimate of 29 economists surveyed by Bloomberg News.

To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net