Canada’s dollar appreciated versus most of its major peers and traded at almost a five-month high against its U.S. counterpart before a report that may show the world’s 10th-largest economy expanded last quarter.
The currency is headed for a 1.2 percent advance this week, the most since December. It is the worst performer this year versus its commodity-exporting peers of Australia, New Zealand and Norway, according to Bloomberg Correlation Weighted Indexes. Brent oil yesterday touched the highest since July 2008.
“The rise in the price of crude oil is supportive for the Canadian dollar,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “We expect modest Canadian-dollar strength against the U.S. dollar over the next one to three months.”
Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, rose 0.4 percent to C$1.3064 against the euro at 7:42 a.m. in Toronto. It traded at 98.82 cents per U.S. dollar, after strengthening yesterday to 98.42 cents, the highest since September. One Canadian dollar purchases $1.0119.
Gross domestic product probably grew at an annualized pace of 1.8 percent in the final three months of 2011, slowing from a pace of 3.5 percent in the third quarter, according to the median of 25 forecasts in a Bloomberg News survey. The data will be released in Ottawa at 8:30 a.m.
Brent surged as much as 4.7 percent to $128.40 yesterday, the highest price since July 2008, the month Brent reached a record $147.50.
“There are still risks in the near term that the price of crude oil could break higher still,” said Bank of Tokyo’s Hardman. “That should add further momentum to the recent Canadian dollar gains that we’ve seen.”
Brent for April settlement slipped 0.9 percent to $125.12 on the London-based ICE Futures Europe exchange after falling as much as 1.3 percent earlier.
To contact the reporter on this story: Chris Fournier in Montreal at firstname.lastname@example.org
To contact the editor responsible for this story: Dave Liedtka at email@example.com