Canada’s Dollar Gains as Weak Greenback Spurs Commodity Demand

Canada’s currency gained for a second day on speculation a weaker U.S. dollar will drive investor demand for commodities such copper and oil as a hedge against potential inflation.

“The story now is more about U.S. dollar weakness,” said Eric Lascelles, chief economics strategist at TD Securities Inc. in Toronto. “Commodities aren’t jumping like they did for a while, but they’re still lending a bit of support, and the weak U.S. dollar helps the loonie in that respect.”

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The greenback may be nearing its peak against the loonie as investors begin to focus on Canada’s long-term growth prospects, according to Barclays Capital strategists Steven Englander and Mathieu Zaradzki.