Canadian Dollar Rises for Third Day as Stock-Index Futures Gain

By Chris Fournier

May 20 (Bloomberg) -- Canada’s currency climbed for a third straight day as an increase in U.S. stock-index futures spurred demand for higher-yielding assets.

“The Canadian dollar will continue to take its cue from global risk factors, primarily measured by equities,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “The loonie is really being influenced by macro risk factors rather than by domestic economic data.”

The Canadian currency, known as the loonie, appreciated 0.5 percent to C$1.1503 per U.S. dollar at 8:12 a.m. in Toronto, from C$1.1558 yesterday. It touched C$1.1478, the strongest since May 11. One Canadian dollar buys 86.93 U.S. cents.

Consumer prices rose 0.4 percent in April from a year earlier after a 1.2 percent increase in the previous month, Statistics Canada said today in Ottawa. The median forecast of 21 economists surveyed by Bloomberg was a 0.6 percent advance.

“Diminished inflation helps to maintain the value of money invested in a country,” said Eric Lascelles, Toronto-based chief economics and rates strategist at TD Securities Inc.

Futures on the Standard & Poor’s 500 Index expiring in June added 0.7 percent.

The loonie will weaken to C$1.19 versus the U.S. dollar by year-end, according to the median forecast in a Bloomberg survey of 42 analysts and economists.

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