Canadian dollar made gains against its two weekly U.S.

Canadian dollar made gains against its two weekly U.S. and the euro as crude oil to a stock price in two years and increased demand pushed higher-yielding assets.

Canadian currency, nicknamed the loonie, is a 2 percent this month and 0.8 percent in the last five days against the dollar, recovering from two consecutive weekly losses, on speculation that the Bank of Canada will resume its cycle of interest rate hikes in 2011. The Canadian dollar has gained more than 12 percent this year versus the Danish krone, the most among the 16 most-traded counterparts.

"The Canadian data was not strong enough to change the perception that the Bank of Canada will begin to walk in the second quarter," wrote David Watt, senior currency strategist at RBC Royal Bank of Canada Capital Markets unit, a e-mail. "There is little reason for the rally in the U.S. dollar against the Canadian dollar to be sustained and good argument for that fade."

The Canadian currency climbed to C $ 1.0062 per U.S. dollar at 11:47 am in Toronto, compared with C $ 1.0140 on 17 December. Appreciated by 1.3 percent to C $ 1.3198 against the euro, after five straight gains through today.

"The U.S. growth outlook still looks pretty good," said Watt. "The feeling of risk remains alone. The actions follow the rotation of the profits and now oil prices are starting to gain momentum. A test of parity is likely to be aligned with a test of $ 100 per barrel oil. "

Bank of Canada

Brent crude rose to 49 cents to $ 94.74 a barrel on London's ICE Futures exchange in Europe, the highest since October 2008. Prices have gained 2.3 percent this week, and 20 percent this year.

500 of Standard & Poor's gained 1 percent this week. U.S. markets are closed today.

The Bank of Canada, which meets next on Jan. 18, left its benchmark interest rate by 1 percent on 07 December for the second time directly to measure the global economic recovery after three successive increments.

Economists predict that the central bank will raise the target rate overnight to 1.25 percent in late June.

Canadian government bonds were mixed. The yield on the benchmark 10-year note fell 2 basis points to 3.17 percent from 3.19 percent on 17 December. A basis point is 0.01 percentage point. The yield touched 3.37 percent on Dec. 14, the highest since June 21. The price of the 3.5 percent security due in June 2020 rose 11 cents to C $ 102.55.

Bond yields

two-year yield rose six basis points to 1.70 percent. five-year yields rose five basis points to 2.44 percent.

Government bonds have lost 0.4 percent this month, comparing this year's gain to 5.8 percent, according to a Merrill Lynch Bank of America Index.

Canadian gross domestic product grew 0.2 percent to a seasonally adjusted annual rate of C $ 1,240,000,000,000 (1.22 trillion U.S. dollars) in October after contracting 0.1 percent in September, the national statistics agency said yesterday in Ottawa. Economists expected a 0.3 percent increase, based on the median of 21 forecasts.

Reports earlier this week showed that wholesale prices unexpectedly stagnated, inflation slowed, while retail sales rose more than economists had forecast.