Canada's Dollar Strengthens as Stocks, Commodities Advance

By Chris Fournier

Oct. 14 (Bloomberg) -- Canada's currency strengthened for a second day, its longest winning streak in more than two weeks, as global stock markets rose and prices for commodities such as crude oil advanced.

``When we see more up days in equity markets, it tends to equate to risk appetite, and by extension, a bid for commodity markets and commodity-market currencies,'' said Jack Spitz, a managing director of foreign exchange at National Bank of Canada in Toronto. ``That equates to a stronger'' Canadian currency.

The Canadian dollar appreciated as much as 1.5 percent to C$1.1306 per U.S. dollar from C$1.1475 yesterday. It last traded at C$1.1403 at 7:43 a.m. in Toronto. One Canadian dollar buys 87.72 U.S. cents.

Crude oil added as much as 4.5 percent to $84.83 a barrel. Copper headed for the biggest two-day gain since at least 1986. Commodities account for about half of Canada's export revenue.


Stocks rose in Europe and Asia. U.S. stock-index futures rallied on speculation the government may spend about $125 billion on stakes in the country's largest banks to shore up confidence in the financial system.

Spitz predicts the loonie, as Canada's currency is known because of the aquatic bird on the one-dollar coin, will trade at C$1.15 by year-end.

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