Canada's Dollar Strengthens as Crude Oil, Gold Reach Records

Canada's dollar rose to an almost two-month high as commodities advanced, boosting its appeal., Bloomberg 2/27/2008 1:55:02 PM

The currency gained for a third day after crude oil and gold each climbed to a record as a weakening U.S. dollar spurred investors to buy commodities to hedge against inflation. Commodities account for about half of Canada's exports. The Canadian dollar has gained 3.2 percent against its U.S. counterpart over the past three days, the most since at least 1995.

The currency rose 0.16 percent to 97.99 cents per U.S. dollar at 9:47 a.m. in Toronto. Earlier it touched 97.60, the strongest since Dec. 28. One Canadian dollar buys $1.0205.

The Bank of Canada's commodity price index climbed to a record during the week ended Feb. 13 as prices of base metals, grains and energy products rose.

Federal Reserve Chairman Ben S. Bernanke is scheduled to deliver his semi-annual testimony to the House Financial Services Committee at 10 a.m. in Washington. He will appear before the Senate Banking Committee tomorrow.

The yield on the two-year Canadian government bond fell 6 basis points, or 0.06 percentage point, to 3.03 percent. The price of the 4.25 percent bond maturing in December 2009 rose 10 cents to C$102.07.