TORONTO (Reuters) - The Canadian dollar vaulted well over a 1-1/2 cents higher against the U.S. dollar on Thursday, as equities markets rallied, sweetening the outlook for global growth and the commodities that Canada produces.
The Canadian unit ended the North American session at C$1.0061 to the U.S. dollar, or 99.39 U.S. cents, up from C$1.0236 to the U.S. dollar, or 97.69 U.S. cents, at Wednesday’s close.
Including moves after the official market close, it was the biggest single-day decline for the U.S. dollar against its Canadian counterpart since November 1988, according to EcoWin. The Canadian dollar rose as high as C$1.0015 4:40 p.m. (2140
The correlation between equity market performance and foreign exchange movements has been unusually high lately, and the Canadian dollar was the beneficiary of Thursday’s equities rally, said Gareth Sylvester, senior currency strategist at HIFX Plc in San Francisco.
The Toronto Stock Exchange ended the day up nearly 2 percent as commodities rebounded on the back of a tentative agreement by U.S. lawmakers on a $150 billion economic stimulus package.
“Right now, equity markets are the best barometer for expectations of global growth and they are very sensitive to shifts in confidence and expectations, and that’s essentially why traders are taking their cues from equity markets when determining trades in the FX arena.”
Reporting by John McCrank; Editing by Peter Galloway