Canada’s Loonie Headed Back to Par With Greenback, Gartman Says

[Enivid]

Canada’s currency will return to par with its U.S. counterpart in as little as six months as commodity prices rebound, pessimism peaks and the nation’s political turmoil abates, according to Dennis Gartman.

“I can feel myself getting ready to be quite bullish on the Canadian dollar,” said Gartman, an economist and the editor of the Gartman Letter, who correctly predicted the currency’s most recent run to parity in 2007. “I have the sense that this might be a move back towards par and beyond.”

The Canadian dollar reached equal value to the U.S. dollar in September 2007 for the first time in three decades as prices soared for commodities such as crude oil, copper and aluminum, which account for about half the country’s export revenue. It plummeted 18 percent last year, the most ever, as a global recession curbed demand for the same commodities. The currency is down 1.6 percent this year.

The Canadian dollar fell to C$1.2211 at 7:30 a.m. in Toronto. One Canadian dollar buys 81.43 U.S. cents.

Gartman, 58, predicted as early as 2002 the Canadian dollar would reach parity against the U.S. dollar. In January of that year, the currency traded below 62 U.S. cents.

“People laughed at me all the way until it finally reached par,” he said in an interview. “I’m starting to buy the Canadian dollar and if we can push the U.S. dollar under C$1.22, I’ll buy more.”

Several hundred institutional clients including the world’s largest banks, energy dealers, grain traders and hedge funds and mutual funds subscribe to Gartman’s newsletter, which also has hundreds of individual subscribers, he said. Gartman, who is based in Suffolk, Virginia, declined to give specific subscriber names.

From Bloomberg News.