Risk Demand Pushes Canadian Dollar to 3-Week High

The Canadian dollar – nicknamed the “loonie” – broke a three-week high against its U.S. counterpart as speculation drove commodity prices higher on a greater expectation of a U.S. recovery. About 75 percent of Canada’s exports find their way to the U.S. market and positive growth signs in the U.S. tends to mean higher export sales and a boost to the Canadian economy.

“Bernanke gave the market a little bit of calm and confidence, and obviously that’s carried over,” said Steve Butler, managing director of foreign-exchange trading at Bank of Nova Scotia’s Scotia Capital, in Toronto. “It looks like we’re going to get a good start to the week. It’s just a matter of time before we turn the corner.”

The Canadian currency advanced 0.5 percent to 97.68 cents per U.S. dollar at 8:09 a.m. in Toronto, from 98.13 cents on Aug. 26. It appreciated earlier today to 97.57 cents, the strongest level since Aug. 5. One Canadian dollar buys $1.0235.

Source: Bloomberg

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