Canada dollar strong due to economy: Flaherty

Sat Oct 13, 2012 3:45am EDT
 
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By Lesley Wroughton

TOKYO (Reuters) - The appreciation of the Canadian dollar reflects the strength of Canada's economy and commodity markets, the country's finance minister said on Saturday, indicating comfort with the currency's value.

Speaking on the sidelines of the IMF-World Bank meetings in Tokyo, Jim Flaherty suggested the Canadian dollar would remain in its current trading range against the U.S. dollar for some time.

The Canadian dollar recently hit a 13-month high against the greenback and data shows Canadian exports are falling.

"I think most Canadian business people are accepting that the dollar will be in the range it is for a while and relatively strong vis-à-vis the U.S. dollar," Flaherty told Reuters. "It is a reflection of the commodities markets; it's a reflection of the fact that we still have some strength in the Canadian economy."

The Canadian currency closed at C$0.9793 versus the U.S. dollar, or $1.0211, down slightly from Thursday.

Flaherty said a review of a $15.1 billion Chinese takeover bid for Canada's oil and gas explorer Nexen Inc was purposefully rigorous to protect Canada's interests.

"It matters not just for this transaction but for other potential transactions down the road -- be it with China or someone else," he said when asked whether the review could scare off Beijing if it believed its investment was not welcome.

The Canadian government this week extended the review of the bid by 30 days to November 11. Canada, home to the world's third-largest proven oil reserves, is grappling with concerns that approval of the deal could spark a flurry of mega-takeovers of Canadian energy companies.

(Reporting by Lesley Wroughton; Editing by Tim Ahmann)