Bloomberg News

Canadian Dollar Rises From Almost Two-Week Low on U.S. Economy

December 16, 2011

Dec. 15 (Bloomberg) -- Canada’s currency advanced from almost its lowest level in two weeks as U.S. reports on employment and manufacturing indicated Canada’s biggest trading partner’s economy is recovering.

The Canadian dollar, known as the loonie for the image of the aquatic bird on the C$1 coin, rose for the first time in four days versus its U.S. counterpart as Spain sold almost twice its maximum target at a debt auction, easing funding concern related to sovereign-debt turmoil.

“As we continue to see U.S. data on an improving trend, that is positive for the loonie because it means better demand for Canadian exports,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency- exchange network. “Riskier currencies are staging a little bit of a comeback.”

The loonie appreciated 0.4 percent to C$1.0351 after yesterday reaching C$1.0424, the weakest since Nov. 28. One Canadian dollar buys 96.61 U.S. cents.

The Standard & Poor’s 500 Index advanced 0.3 percent, and Canada’s benchmark S&P/TSX Composite Index fell 0.3 percent.

Canada’s government bonds rose, pushing the yield on the 10-year benchmark down three basis points, or 0.03 percentage point, to 1.93 percent. The 3.25 percent securities due in June 2021 gained 25 cents to C$111.40.

Canadian Housing

Existing home sales in November rose at their slowest pace in three months, the Canadian Real Estate Association said, adding to evidence the country’s housing market is cooling.

Seasonally adjusted home sales advanced 0.5 percent from last month to 38,897 units, the Ottawa-based real-estate agency said in an e-mailed statement. Purchases rose 5 percent from a year earlier, the slowest pace since May, while home prices posted the smallest annual increase since January.

Manufacturing in New York, northern New Jersey and southern Connecticut expanded in December more than forecast to the highest level in seven months as measures of employment and new orders improved. The Federal Reserve Bank of New York’s general economic index rose to 9.5, from 0.6 in November. Economists projected the gauge would rise to 3, based on the median of 55 forecasts in a Bloomberg News survey. Readings greater than zero indicate expansion.

The Philadelphia Fed’s general economic index for eastern Pennsylvania, southern New Jersey and Delaware increased to 10.3 in December from 3.6 last month. Economists surveyed by Bloomberg News forecast the gauge would advance to 5, according to the median of 57 estimates that ranged from zero to 12.

“The Philly Fed number particularly was a strong one,” said Thomas Molloy, chief dealer at FX Solutions, a currency brokerage, in Saddle River, New Jersey. “Today we had some numbers out of the U.S. that were actually not so bad and would probably play into the risk-on trade if the rest of the world were not so ugly.”

The loonie has lost 2.3 percent this year, while the dollar has appreciated 2.1 percent and the 17-nation euro has lost 0.6 percent, according to Bloomberg Correlation-Weighted Currency Indexes, a gauge of 10 developed-nation currencies.

--With assistance from Timothy Homan in Washington. Editors: Kenneth Pringle, Dave Liedtka

To contact the reporters on this story: Allison Bennett in New York at; John Detrixhe in New York at

To contact the editor responsible for this story: Dave Liedtka at

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