By Michael J. Moore
Dec. 22 (Bloomberg) -- Canada’s currency rose for the first time in three days as the Globe and Mail reported the government reached a deal with banks to restructure C$32 billion ($26 billion) of insolvent commercial paper and as crude oil gained.
“Asset-backed commercial paper was one of the lingering uncertainties about the credit market in Canada, so this has removed that uncertainty,” said David Watt, a senior currency strategist at RBC Capital Markets in Toronto. “If you start looking around the world at where you want to put your money, with the countries least exposed to risk, Canada is one of the few that remains on the list.”
The Canadian dollar rose 0.7 percent to C$1.2063 per U.S. dollar at 8:56 a.m. in Toronto, from C$1.2152 on Dec. 19. One Canadian dollar buys 82.90 U.S. cents.
The commercial-paper agreement that the government reached with banks including Deutsche Bank AG and Merrill Lynch & Co. over the weekend should give investors access to their money by January unless there are any last-minute complications, the Globe and Mail reported today, citing unidentified people. The asset-backed commercial paper hasn’t traded since August 2007.
The agreement still requires a bankruptcy judge’s final approval, which may come as early as today or tomorrow, the Globe and Mail said.
Crude oil for February delivery rose as much as $1.08, or 2.6 percent, to $43.44 a barrel in electronic trading on the New York Mercantile Exchange. Oil is the largest component of the Bank of Canada’s Commodity Price Index, accounting for 21 percent.
To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net
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