Canadian Dollar Drops From One-Week High Versus Greenback as Oil Declines

By Catarina Saraiva - Feb 14, 2011 9:23 PM GMT+0800

Canada’s dollar fell from its highest level in more than a week as a decline in crude oil discouraged demand for the nation’s assets.

“An $85 handle in oil seems a little bit low not to see some pullback in the Canadian dollar,” said C.J. Gavsie, managing director for foreign-exchange trading at Bank of Montreal’s BMO Capital Markets unit in Toronto. “There was some risk appetite last week and there’s some profit-taking going on now.”

Canada’s dollar rose last week against most of its major counterparts including the yen as the nation had its first trade surplus in 10 months, increasing speculation the Bank of Canada will raise borrowing costs sooner than other central banks.

The loonie depreciated 0.1 percent to 98.83 cents per U.S. dollar at 8:19 a.m. in Toronto, from 98.74 on Feb. 11. One Canadian dollar buys $1.0114. The loonie touched 98.51 cents, the strongest level since Feb. 4.

Futures on crude oil fell 0.3 percent to $85.36 a barrel. Standard & Poor’s 500 Index futures expiring in March decreased 0.1 percent.

To contact the reporter for this story: Catarina Saraiva in New York atasaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net