Canada Dollar Touches 7-Month High as Commodity Currencies Gain

[Enivid]

Canada’s dollar rose to the highest in more than seven months as investors shunned the U.S. greenback in favor of currencies most likely to benefit from a rebound in global economic growth.

The Canadian dollar posted its biggest weekly gain since October as currencies of countries that produce raw materials surged. The ICE’s U.S. Dollar Index dropped to the lowest this year on speculation the creditworthiness of the world’s largest economy is deteriorating.

“This fear is driving gains in the Canadian dollar in that it’s causing the U.S. dollar to slide,” said Aaron Fennell, a Toronto-based futures and currency broker at MF Global Canada Co. “It’s pretty clear that the world continues to need hard assets, which Canada has.”

Canada’s dollar, known as the loonie, advanced 1.6 percent to C$1.1193 per U.S. dollar at 4:43 p.m. in Toronto, compared with C$1.1374 yesterday. It touched C$1.1188, the strongest level since Oct. 9. One Canadian dollar buys 89.34 U.S. cents.

The loonie extended gains after Statistics Canada said the nation’s retail sales rose in March for a third straight month. Overall sales advanced 0.3 percent to C$33.9 billion ($30 billion). Economists expected a 0.5 percent increase in March, based on the median of 21 estimates.

Canada’s dollar climbed 5.2 percent since May 15, the most since the week ended Oct. 31. After reaching a four-year low on March 9, it gained 16 percent as investors stepped out of havens to seek higher-yielding assets such as stocks and commodity- linked currencies amid signs the global economic slowdown is moderating.

From Bloomberg News.