Canada’s Dollar Rises From Six-Week Low as Crude Oil Advances

By Chris Fournier

Jan. 21 (Bloomberg) -- Canada’s dollar rose from a six-week low against its U.S. counterpart as an advance in crude oil prices increased the currency’s appeal.

“Crude oil in particular has had a very good bounce, and that’s supporting the Canadian dollar,” said Adam Cole, global head of currency strategy at Royal Bank of Canada in London.

Canada’s currency traded at C$1.2668 per U.S. dollar at 8:11 a.m. in Toronto, compared with C$1.2670 yesterday. It touched C$1.2726, the weakest level since Dec. 9. One Canadian dollar buys 78.99 U.S. cents.

Crude oil for March delivery advanced as much as 2.7 percent to $41.93 a barrel in electronic trading on the New York Mercantile Exchange. Crude generates about a tenth of Canada’s export revenue and is the largest component of the Bank of Canada’s Commodity Price Index, accounting for 21 percent.

Canada’s dollar will weaken to C$1.31 against the U.S. dollar by the end of June, RBC predicts. That’s at odds with the median forecast of 36 economists surveyed by Bloomberg News, which has the loonie strengthening to C$1.25.

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