The Canadian dollar had its biggest gain in almost four months against its U.S. counterpart as crude oil, the country’s biggest export, rallied on stronger-than- forecast economic data from the U.S. and the U.K.
The currency strengthened versus most of its major peers as a report in the U.S. showed initial claims for unemployment insurance fell more than forecast last week. The U.K. avoided a triple-dip recession with stronger than expected growth in the first quarter and crude oil saw its biggest two-day jump in nine months.
“After five days of gains in risk assets the dam has finally broken in dollar/CAD,” said Adam Button, a currency analyst at forexlive.com, by phone from Montreal. “The pair had been resistant against better news in the stock market and the European bond market for a number of days, but now with the rallies in oil and gold today the Canadian dollar can no longer overlook the obvious good news in risk assets.”