2014.03.0708:14:02UTC+00Canada's Loonie Touches Peak Mark in 2 Weeks on Economic Prospects

Canada's currency bolstered over C$1.10 per U.S. dollar for the first time in more than two weeks as building permits spiked up more than projected, adding to indications that the global economy is emerging.

The currency rallied for a second day after the Bank of Canada continue with its key interest rate unaltered yesterday and reiterated its next move depends on the development of the economy. Global stocks advanced as the European Central Bank held its benchmark rate unmoved and raised growth projections. U.S. unemployment-benefit claims slide down to the weakest since November even as a harsh winter has weighed on other reports.

“Every piece of data we’re getting is confirming weather has impacted growth but it hasn’t derailed growth, and globally central banks aren’t really moving away from their stance, and the Bank of Canada holds a very neutral tone, not a dovish tone,”Camilla Sutton, head of currency strategy at Bank of Nova Scotia said by phone from Toronto. “All of that is very good for a pro-cyclical currency like the Canadian dollar.”

The loonie, as Canada’s currency is known for the image of the aquatic bird on the C$1 coin, jumped 0.4 percent to C$1.0985 per U.S. dollar at 5 p.m. in Toronto. It reached C$1.0956, the best performing mark since February 19, achieving beyond its 50-day moving average for the first time since October, a technical signal it may increase more. One loonie purchases 91.03 U.S. cents.

The Canadian dollar plummeted to C$1.1224 in January, the lowest since 2009, as investors bet on lower interest rates after the central bank said inflation would stay at almost the weakest mark of its 1 percent-to-3 percent goal band this year and flagged the currency’s strength as a headwind to exports.

No Mention

Yesterday’s policy statement made no mention of the currency and stated that the biggest information on economic development and inflation were stronger than assumed.

The worth of residential building permits granted last month leaped 26.3 percent to C$4.60 billion ($4.18 billion), Statistics Canada said. Non-residential permits relinquished 14.6 percent to C$2.39 billion, trimming down the advances in total permits to C$6.99 billion, an 8.5 percent hike. Economists surveyed by Bloomberg projected a 1.7 percent increase.

U.S. unemployment claims decreased by 26,000 to 323,000 last week, the Labor Department reported.

The MSCI World Index of stocks rallied 0.4 percent.