Canada's Dollar Gains the Most in a Month

Canada's dollar rose the most in more than a month as oil reached a record near $140 a barrel.

The Canadian dollar gained versus 14 of the 16 most- actively traded currencies as corn also jumped to a record and gold gained. Traders bought commodities, which account for about half of Canada's exports, as a hedge against a weakening U.S. dollar. The oil sands in Alberta contain the largest crude deposits outside the Middle East.

Canada's dollar strengthened 0.9 percent to C$1.0198 per U.S. dollar at 1:10 p.m. in Toronto, from C$1.0294 on June 13. It was the biggest gain since May 9, when the currency rose 1.2 percent after a report showed job growth accelerated in April. One Canadian dollar buys 98.04 U.S. cents.

The Canadian currency has traded near parity with its U.S. counterpart this year. It touched a 2008 low of C$1.0379 on Jan. 22, and a high of 97.12 cents per U.S. dollar on Feb. 28.

Canada's currency depreciated 2.2 percent this year as slower growth in the U.S., Canada's biggest trading partner, reduced demand for the nation's manufactured goods such as cars and auto parts. Gross domestic product unexpectedly contracted at a 0.3 percent annualized rate in the first quarter, the first drop in almost five years, according to the government.

Canada, Bloomberg
6/16/2008 1:24:03 PM