Canada’s Dollar Strengthens to 20-Month High as Oil Advances

Toronto - Canada’s dollar rose to the highest level since it last traded on a one-for-one basis with its U.S. counterpart in July 2008 as crude oil rose above $86 a barrel, bolstering the appeal of commodity-linked currencies. The loonie, as the currency is nicknamed, has gained 5.2 percent this year against the greenback for the second-best performance among the 16 most-traded pairs tracked by Bloomberg. Mexico’s peso appreciated 6.8 percent. Crude is both countries’ biggest export. Canadian employers added jobs for a third straight month in March, a jobs report on April 9 is expected by analysts to show. “It’s a bit like watching paint dry,” said Shaun Osborne, chief currency strategist in Toronto at Toronto-Dominion Bank, Canada’s second-largest lender, referring to the Canadian dollar climb toward parity. “We’re characterizing it as a grinding bid for the Canadian dollar. We’re just fractions away from parity. It’s just a question of time.” The currency appreciated as much as 1 percent to C$1.0011 per U.S. dollar, and traded at C$1.0014 at 4:40 p.m. in Toronto, from C$1.0111 on April 2. One Canadian dollar buys 99.86 U.S. cents. Today’s high is the most the currency has traded versus the greenback since July 22, 2008. Crude for May delivery rose as much as $2.03, or 2.4 percent, to $86.90 a barrel, the highest level in 17 months. “The door is wide open” to parity, said Christian Dupont, a trader at Desjardins Group in Montreal, who predicted the loonie would reach a one-for-one basis this week. Oil “grinding higher” is the main reason for the appreciation today, he said. Peso, Loonie Employers added 25,000 jobs in March, according to the median of 21 estimates in a Bloomberg survey. The nation’s statistics agency releases the data on April 9 at 7 a.m. in Ottawa. Osborne said a strong jobs report on April 9 should push the loonie to $1.0204 over the next two to four weeks, meaning it would cost 98 Canadian cents to purchase 1 U.S. dollar. Mexico’s peso and Canada’s dollar are outperforming all other major currencies for the first time since at least 1998 and probably will keep rallying as the U.S. recovery lifts the rest of the world’s largest trading bloc. The currencies are rising in tandem with the Intercontinental Exchange Inc.’s Dollar Index for a second straight quarter for the first time in 11 years. Hedge funds and large speculators are the most bullish on the peso and Canada’s loonie since at least April 2008, before the credit crisis swamped Lehman Brothers Holdings Inc. five months later, driving both down as much as 31 percent. Speculators had 70,296 more bets that the loonie would rise than contracts that profit from it falling as of March 30 and 73,027 more the week before, when the gap was the widest since October 2007, data from the Washington-based Commodity Futures Trading Commission show.