Canada’s dollar gained against its U.S. counterpart for a third day as the Reserve Bank of Australia cut its benchmark interest rate to a record 2.75 percent, intensifying the search for higher-yielding assets.
The Canadian dollar rose to a two- week high versus its U.S. peer amid gains in crude oil, the country’s largest export, and speculation the U.S. will maintain stimulus and the European Central Bank will cut interest rates.
The euro fell against 12 of its 16 most-traded peers as a report showed unemployment in the currency bloc climbed to a record in February, adding to concern the economy will struggle to emerge from recession.
The Canadian dollar reached the strongest level in three weeks against its U.S. peer as a report showed American inflation is contained, giving the Federal Reserve scope to maintain its monetary stimulus program.
Canada’s dollar strengthened for the first week in three as risk appetite outweighed concern that Europe’s sovereign-debt crisis is worsening, sending crude oil, the nation’s biggest export, and stocks higher.
Canada’s dollar gained to the strongest in almost three months after U.S. policy makers said their key interest rate will stay at almost zero until at least late 2014, boosting the attraction of Canada’s 1 percent rate.
Canada’s dollar weakened the most this month versus the greenback and the yen as evidence of a slowing U.S. economic recovery made the currencies of countries reliant on commodity exports less attractive.