Canadian Dollar Trades Close to 2-Month High

Canada's dollar traded close to a two-month high as the price of oil increased, bolstering prospects for the nation's exports., Bloomberg 5/26/2008 8:25:15 AM

The Canadian dollar extended its gains from the last week, when it reached 98.20 cents per U.S. dollar, the strongest since March 14. Crude oil rose for a second day in New York, after reaching a record high last week, as militant attacks in Nigeria and declining output in Mexico increased the potential for supply disruptions. Oil, gold and other raw materials account for about half of Canada's exports.

Canada's dollar was little changed at 98.97 cents per U.S. dollar at 10:57 a.m. in Toronto, from 98.99 cents on May 23. One Canadian dollar buys $1.010.

Crude oil for July delivery rose as much as $1.27, or about 1 percent, to $133.46 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Canada's economy probably slowed last quarter, expanding at a 0.4 percent annualized rate from a 0.8 percent clip the previous period, according to the median forecast of economists in a Bloomberg News survey. Statistics Canada will release the data on May 30.

The loonie, as the currency is known because of the image of the bird on the one-dollar coin, has traded close to parity with its U.S. counterpart this year after climbing 17 percent in 2007.

Futures traders last week increased their bets that the Canadian dollar will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show.

Canadian Dollar Trades Close to 2-Month High