Canadian dollar rises over a cent on commodities
By John McCrank
TORONTO (Reuters) - The Canadian dollar climbed more than a cent against the U.S. dollar on Monday, supported by surging energy and non-energy commodity prices.
Domestic bond prices, with a lack of domestic data to influence direction, were mixed.
At 9:30 a.m., the Canadian dollar was at C$1.0010 to the U.S. dollar, or 99.90 U.S. cents, up from C$1.0130 to the U.S. dollar, or 98.72 U.S. cents, at Friday close.
Canada is a major oil exporter and the price of U.S. light crude futures, near $99 dollars a barrel, has supported the Canadian dollar. But non-energy commodities are also playing a key role in the currency's strength, said David Watt, senior currency strategist at RBC Capital Markets.
"You look at these non-energy commodity prices and a lot of the base metals and the agricultural commodities are still surging and if you are an economy that is sensitive to those prices, your economy is going to be doing pretty well," said Watt.
"We've got an indicator that we follow that's base metals and it includes wheat as well, and since late January, it's up 16, almost 17 percent and right now it's only 3 percent below its peak from May of last year," said Watt.
The Bank of Canada has said that the main drivers of the Canadian dollar right now are energy and non-energy commodities, as well as the interest rate spread between Canada and the United States.
Analysts and investors will get a chance to hear more of what the Bank of Canada is thinking on Tuesday, when Senior Deputy Governor Paul Jenkins and Deputy Governor John Murray are scheduled to speak to a government committee about the impact of the strong Canadian dollar on the economy. Continued...