Loonie boosted by oil, bonds rise

Mon Apr 28, 2008 9:33am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John McCrank

TORONTO (Reuters) - The commodity-linked Canadian dollar rose against the U.S. dollar on Monday, boosted by record oil prices.

Domestic bond prices, with no domestic data to influence direction, rose along with the larger U.S. market.

At 9:20 a.m. EDT, the Canadian dollar was at C$1.0148 to the U.S. dollar, or 98.54 U.S. cents, up from C$1.0163 to the U.S. dollar, or 98.40 U.S. cents, at Friday's close.

The currency had risen as high as C$1.0067 to the greenback, or 99.33 U.S. cents, on record prices for oil, a key Canadian export, but was unable to hang on to the gains.

U.S. crude oil hit a record high of $119.93 a barrel on supply disruptions ahead of the U.S. summer driving season.

Much of the Canadian dollar's 60 percent rise since 2002 has been linked to rising oil prices.

But the currency's response to the latest surge in crude prices has been muted.

"Oil prices at these levels are a net positive for Canada, however, I think what the market is also picking up on is that in the near term, there could be a very large negative, because oil at $120 only worsens the contraction in the American economy," said Camilla Sutton, currency strategist at Scotia Capital.   Continued...