Canadian Dollar Rises, Central Banks Support Markets, Oil Gains

By Daniel Kruger

Sept. 18 (Bloomberg) -- The Canadian dollar gained as commodities including crude oil rose after the world's biggest central banks said they will act jointly to revive the financial markets, increasing confidence in global economic growth.

Canada's dollar strengthened along with other currencies that benefit from demand for natural resources, including the New Zealand dollar, the Australian dollar and the Norwegian krone, as oil rose above $100 a barrel for the first time since Sept. 15 and gold climbed to a six-week high.

``It's going to be the financial market and commodities that do the driving,'' said Eric Lascelles, a strategist at TD Securities in Toronto. ``There may be some more upside in the Canadian dollar.''

Canada's dollar, dubbed the loonie because of the aquatic bird on the one-dollar coin, advanced 1.1 percent to C$1.0612 per U.S. dollar at 8:20 a.m. in Toronto, from C$1.0731 yesterday. One Canadian dollar buys 94.22 U.S. cents.

The Fed said in a statement on its Web site it authorized other central banks to auction $180 billion in dollar funds to financial institutions. The European Central Bank will offer up to $40 billion for one day today and increase the amount of dollars provided to European banks in existing longer-term auctions, it said.

To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net