XPost: misc.invest.canada, soc.culture.canada, can.atlantic.general   
   XPost: can.general, can.politics, soc.culture.quebec   
   From: abc@a123.ca   
      
   Loonie soars to three-year high   
      
      
   BY ERIC LAM   
      
   The Canadian dollar appreciated to 102.02 US cents , the strongest level   
   since March 2008, as crude oil advanced.   
      
   The Canadian dollar jumped one-third of a cent to a new three-year high   
   above US$1.02 Friday morning even as oil prices have begun to stabilize   
   on news Saudi Arabia intends to make up any supply disruptions out of   
   Libya.   
      
   The loonie touched US$1.0203 at about 8 a.m. ET, its highest level since   
   March 2008.   
      
   A major driver for this new strength is weakness in the U.S. dollar,   
   Camilla Sutton, currency strategist with Scotia Capital, said in a report   
   Friday.   
      
   "The U.S. dollar has managed to weaken in the face of rising risk   
   aversion as rising oil prices are playing into several market fears," she   
   said.   
      
   “The first is how it will impact global inflation and how central banks   
   will react to it ... In addition, rising oil prices will weigh on the   
   fragile U.S. recovery, which in turn could support an extended dovish   
   stance from the Fed,” Ms. Sutton said.   
      
   Currency markets are keeping a keen eye on the Bank of Canada rate   
   announcement on Tuesday.   
      
   “The Bank of Canada’s interest rate decision and statement will provide   
   significant insight in to whether or not the market is correctly pricing   
   the risks of a BoC hike this spring,” Ms. Sutton said.   
      
   All 39 forecasters surveyed by Reuters predicted the Bank of Canada would   
   keep its key interest rate on hold at 1.0% on Tuesday. But 24 of poll   
   participants, more than 60%, expect interest rates to rise by the end of   
   the first half. The median forecast points to a quarter-point increase on   
   May 31 to 1.25%.   
      
   But the strength of the currency will be a key factor in the bank’s   
   decision.   
      
   In its January rate statement, the bank said the persistent strength of   
   the currency, combined with Canada’s low productivity, was holding back   
   the export recovery and contributing to a widening of the current account   
   deficit.   
      
   In subsequent speeches, bank officials have suggested they are resigned   
   to the strong currency as a permanent feature, urging companies to not   
   base their business models on a weaker Canadian dollar.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)