Canadian Dollar Strengthens as Commodity Currencies Advance

By Daniel Kruger

Sept. 10 (Bloomberg) -- The Canadian dollar gained as an increase in risk appetite and rising prices for natural resources including crude oil helped boost commodity currencies.

Canada's currency advanced along with the Australian dollar and the New Zealand dollar as traders sold low-yielding currencies including the Japanese yen and the Swiss franc. Crude oil rose after the Organization of Petroleum Exporting Countries announced it would cut oil production.

``It's a combination of a small rebound in commodity prices and broad-based dollar weakness that's helping the Canadian dollar,'' said Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto. ``The link between increasing risk appetite and the Canadian dollar is through commodities.''

The Canadian currency, dubbed the loonie because of the aquatic bird on the one-dollar coin, rose 0.3 percent to C$1.0686 per U.S. dollar at 9:49 a.m. in Toronto, from C$1.0713 yesterday. One Canadian dollar buys 93.58 U.S. cents.

Crude oil futures rose 1.2 percent on the New York Mercantile Exchange to $104.47 after falling as low as $101.74 yesterday.

Canadian labor productivity fell for a third consecutive quarter as falling exports curbed production, a report showed. Productivity, a measure of how much an employee produces in an hour of work, dropped 0.2 percent between April and June, Statistics Canada said today in Ottawa. Economists anticipated a 0.3 percent gain, the median of 12 estimates. The agency also doubled the estimated first-quarter decrease to 0.6 percent.

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