Canadian dollar advanced for the first time in four weeks

Canadian dollar advanced for the first time in four weeks, as evidence of a global economic recovery helped crude oil, the main export product of the country, rally to a maximum of two years.

The Canadian dollar lost the currencies of other commodity producers such as Australia and Norway reports this week showed Canada added fewer jobs in November than economists forecast the U.S. unemployment rate unexpectedly rose. The Bank of Canada will refrain from increasing borrowing costs on Dec. 7, according to 12 economists surveyed by us.

"The demand for Canadian dollar assets has led to the recent strength," wrote Shane Enright, executive director of CIBC Canadian Imperial Bank of Commerce Market World Toronto, via e-mail.

The Canadian currency appreciated 1.7 percent to C $ 1.0039 per U.S. dollar yesterday, at $ 1.0213 on 26 November. It touched C $ 1.0003 yesterday, the strongest level since 11 November. One Canadian dollar buys 99.61 U.S. cents. The currency will weaken to C $ 1.07 by the end of the second quarter, "said Enright.

Norwegian Crown advanced 3.4 percent to 5.9523 against the dollar, while Australia dollar strengthened 3 percent to 99.31 U.S. cents.

The Canadian dollar strengthened to a database one by one against the U.S. dollar in late March, according to the median forecast in a survey of 30 economists. The currency hit a level stronger than the parity of 5 to 11 November.

"Parity still feel it will be sticky," Enright said CIBC. "Our data this week has hardly been stellar."

Job Reports

The currencies of Canada and Mexico, the boat averaged three-quarters of its exports to the U.S., were the only major currency counterparts yesterday not to raise U.S. after reports of job dimmed the prospects of rising interest rates.

Canadian employers added 15,200 jobs in November after an increase of 3,000 in the previous month, Statistics Canada said yesterday. The median forecast of 24 economists surveyed by us was for a gain of 19,800. The unemployment rate fell unexpectedly to 7.6 percent from 7.9 percent.

U.S. payrolls grew by 39,000, less than the most pessimistic forecast of economists surveyed by us, after a review of progress in 172,000 the previous month, figures showed Labor Department. The unemployment rate rose to 9.8 percent, the highest since April.

The gross domestic product of Canada's economy 10 º world's largest, grew by a lower than expected 1 percent annual pace in the third quarter after the earnings revised 2.3 percent and 5.6 percent in the previous two quarters, Statistics Canada said Nov. 30. The median estimate of 26 economists surveyed by us was for a gain of 1.5 percent.

View interest rates

Compared traders betting on the prospects for an increase in interest rates after the jobs report. The yield on the March 2011 contract bankers' acceptances, an indicator of the confidence of the cost of short-term loans, fell eight basis points, or 0.08 percentage point to 1.45 percent.

Bax called contracts averaged 20 basis points above the target overnight central bank from 1992 show. Hedge funds and money managers use contracts to protect against exposure to interest rates and betting.

The Bank of Canada kept its target interest rate by 1 percent in October, after three successive increments of a quarter percentage point from June 1, citing a deteriorating U.S. economic outlook, the Canada's largest trading partner.

The yield on the Canadian government two years fell four basis points to 1.63 percent this week after touching 1.72 percent two days ago, the highest since Nov. 25. The price of the guarantee of 1.5 percent due December 2012 rose 8 cents to C $ 99.75.

U.S. yield spread

Two-year bond yielded 117 basis points more than the equivalent maturity U.S. security yesterday. The performance advantage has been reduced from 121 basis points on November 25, which was the largest since January 2004.

Crude oil rose this week a report showed manufacturing in China grew at its fastest pace in seven months. Oil to receive an increase or a decrease in U.S. currency makes commodities more attractive as an alternative investment.

The January crude futures rose 6.5 percent to $ 89.19 a barrel after touching $ 89.49, the highest since October 2008. Canada derives about half its export earnings from raw materials including crude oil, copper, lumber and wheat.