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Canada’s Dollar Appreciates After Four Straight Days of Losses
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By Chris Fournier

Aug. 12 (Bloomberg) -- Canada’s dollar strengthened for the first time in five days as the nation’s trade deficit slimmed more than forecast in June and stocks and crude oil rose, making growth-linked currencies more appealing.

Some “macro-economic variables suggest that the Canadian dollar may have been a little under-valued through the end of June,” said Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., referring to the trade data. The firm is a unit of Canada’s second-largest bank.

The Canadian currency appreciated 0.8 percent to C$1.0933 per U.S. dollar at 10:34 a.m. in Toronto, from C$1.1017 yesterday, when it capped a four-day slide. The currency reached a 10-month high of C$1.0633 on Aug. 4. One Canadian dollar buys 91.46 U.S. cents.

Canada’s June trade deficit narrowed to C$55 million ($50 million), from a record C$1.11 billion in May, after U.S. demand for crude boosted exports, Statistics Canada said today in Ottawa. Economists expected a deficit of C$700 million, according to the median of 19 responses in a Bloomberg News survey.

Crude oil for September delivery advanced 1.7 percent to $70.63 a barrel on the New York Mercantile Exchange. Crude is Canada’s largest export.

The Standard & Poor’s 500 Index, the benchmark for U.S. stocks, climbed 1.2 percent. Canada’s main stock measure, the Standard & Poor’s/TSX Composite Index, rose 0.8 percent.

To contact the reporter on this story: Chris Fournier in Montreal at [e-mail]
Last Updated: August 12, 2009 10:37 EDT