Canada’s Dollar Climbs as U.S. Dollar Tumbles, Stocks, Oil Gain

By Chris Fournier

Dec. 15 (Bloomberg) -- Canada’s currency appreciated as its U.S. counterpart declined against most major currencies and global stock markets and crude oil prices rose, increasing the currency’s appeal.

“The usual suspects are boosting the loonie,” said Firas Askari, head currency trader in Toronto at BMO Nesbitt Burns, a unit of Bank of Montreal, Canada’s fourth-largest bank. “The U.S. dollar is heavy across the board, European equities are up small and crude is up.”

The Canadian dollar strengthened 1.7 percent to C$1.2276 per U.S. dollar at 8:09 a.m. in Toronto, from C$1.2479 on Dec. 12. One Canadian dollar buys 81.46 U.S. cents.

Canada’s currency has declined 19 percent this year as a global recession reduces demand for commodities, which generate about half of Canada’s export revenue. The Bank of Canada’s index of 23 commodity prices fell to the lowest since July 2005 last week.

The U.S. dollar dropped against most of the 16 most actively traded currencies, excluding Mexico’s peso, Brazil’s real and the South African rand.

President George W. Bush said his administration’s deliberations on whether to keep General Motors Corp. and Chrysler LLC out of bankruptcy “won’t be a long process.” The statement accounted for the “paring back of risk aversion” across markets, Christian Lawrence, a currency strategist at RBC Capital Markets in London, wrote in a note.

Europe’s Dow Jones Stoxx 600 Index climbed 0.2 percent to 198.47. The MSCI World, a benchmark index for 23 developed markets, climbed 1 percent to 894.17. Crude for January delivery rose as much as 5.9 percent to $49 a barrel.

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