Canada’s dollar rose for a second day against its U.S. counterpart after Spain sold more than its maximum target at a bill auction, reducing European sovereign- debt-crisis concern and boosting demand for riskier assets.
The loonie, as the currency is nicknamed for the image of the waterfowl on the C$1 coin, advanced before a Bank of Canada meeting where policy makers are forecast to leave the interest rate unchanged at 1 percent. Global stocks and commodities strengthened, increasing appetite for higher-yielding currencies.
“We’re seeing some Canadian dollar strength on the back of a rebound in risk appetite across the markets,” said Matthew Perrier, Toronto-based director of foreign exchange at Bank of Montreal. “We’ve got the Bank of Canada policy announcement later this morning. We’re not expecting any move on interest rates, but we’ll be paying close attention to the statement to see if there’s any hawkish intonation.”
The Canadian currency rose 0.3 percent to 99.67 Canadian cents per U.S. dollar at 7:54 a.m. in Toronto. One Canadian dollar buys $1.0033.
The MSCI World Index (MXWO) of equities added 0.4 percent and crude oil advanced 0.7 percent to $103.64. Oil is Canada’s largest export.
Demand for Spanish 12-month bills was 2.9 times the amount sold, compared with 2.14 times last month, Bank of Spain data today showed. The bid-to-cover for the longer maturity notes was 3.77, compared with 2.93 on March 20. The yield on the 10-year bond slid 15 basis points, or 0.15 percentage point, to 5.92 percent, after rising yesterday to 6.16 percent.
To contact the reporter on this story: Catarina Saraiva in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dave Liedtka at email@example.com