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Canadian Dollar Climbs for a Second Day as Stocks, Oil, Copper Are Higher
Aug 27, 2010 10:08CST
Source:SMM

Aug 27, 2010 (Bloomberg)--

Canada’s dollar appreciated for a second day as commodities including copper and crude oil gained and the U.S. dollar fell against most major currencies.

"An improvement in the global risk backdrop has the U.S. dollar weaker, along with the Japanese yen, against most majors, the Canadian dollar included,” Jack Spitz, managing director of foreign exchange at National Bank of Canada, said by phone from Toronto. “The market has been selling U.S. dollars overnight.”

The Canadian currency rose 0.2 percent to C$1.0571 per U.S. dollar at 4:19 p.m. in Toronto, compared with C$1.0596 yesterday. One Canadian dollar buys 94.60 U.S. cents.

The loonie, as the currency is sometimes known, dropped yesterday to C$1.0668, the lowest point since July 6, as risk aversion drove global stocks lower and weakened the outlook for currencies tied to growth.

The MSCI World Index, a gauge of equities in 24 developed nations, rose 0.4 percent after falling for five straight days. The Standard & Poor’s 500 Index fell 0.8 percent after rising earlier as initial claims for jobless benefits in the U.S. dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington.

Oil Rises

Crude oil for October delivery climbed 1.2 percent to $73.36 a barrel on the New York Mercantile Exchange. Canada, which generates about half its export revenue from raw materials, is the largest supplier of energy products to the U.S., the world’s biggest economy.

Copper for three-month delivery added 2.9 percent to close at $3.3255 a pound on the Comex in New York, the biggest one-day gain in a month.
Canada’s dollar is down 0.2 percent this year, as a faltering economic recovery dims the chances for further Bank of Canada interest-rate increases in 2010. Since reaching C$1.0108 on Aug. 5, the strongest level in three months, the loonie is down 3.7 percent.

"Look for rallies to C$1.0550 to C$1.0605 to draw out selling interest for a continuation lower into daily support,” Matthew Perrier, director of foreign exchange at Bank of Montreal’s BMO Capital unit in Toronto, wrote in a note to clients today, referring to the U.S. dollar versus the loonie. “Expect to find stops below C$1.0520 and buyers to re-emerge at C$1.0475 to C$1.0500.”

Support refers to the lower end of a trading range, where buy orders may be clustered. Stops are automatic orders that traders use to limit potential losses.

Canada’s 10-year bond’s yield fell 3 basis points, or 0.03 percentage point, to 2.8 percent. The price of the 3.5 percent security maturing in June 2020 advanced 29 cents to C$105.90.

Canada will auction C$1.4 billion ($1.3 billion) of 30-year bonds on Sept. 1, a statement on the Bank of Canada’s website said. The 4 percent securities mature in June 2041.

 




 

 

 


 

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