The Canadian dollar reached a seven- week high versus its U.S. peer as the government approved Cnooc Ltd. (883)’s $15.1 billion takeover bid for Nexen Inc. (NXY)
Canada’s dollar rose for a fifth day against the greenback after Prime Minister Stephen Harper on Dec. 7 approved Chinese- controlled Cnooc’s bid while cautioning that future investment in Canada’s energy sector will only occur under “exceptional” circumstances and outlining tighter rules for takeovers. The currency gained against the majority of its 16 most-traded counterparts as better-than-forecast factory data from China signaled stronger demand for Canada’s raw materials.
“Odds are it will be quite positive for the Canadian dollar,” Sebastien Galy, senior foreign-exchange strategist for Societe Generale SA, said of the Nexen deal by phone from New York. “There’s been some reservation from Asia about capital flows, and this provides some clarification that there will be regulation and not protectionism.”