27.07.201305:13:19UTC+00Loonie Dollar exchange at almost five week high ahead of fed assembly

The Canadian dollar exchanged at almost a five-week high before the Federal Reserve meets next week amid speculation policy makers will maintain financial stimulus in the nation’s largest trade partner.

The currency bolster for a third week as investors prepare for next week’s Federal Open Market Committee where Chairman Ben. S. Bernanke is expected to maintain the current position of financial stimulus, according to a Bloomberg survey. A report next week is predicted to display gross domestic product improved 0.3 percent in May after climbing 0.1 percent in April.

Moving Averages

The Canadian currency has traded stronger than its 50-day average versus the dollar since July 22. The currency also touched its 100-day moving average for the third consecutive day. Breaching moving averages signal to some traders a move has momentum to continue.

Oil Correlation

Crude oil futures pull down 0.8 percent to $104.64 per barrel in New York. The asset is near its lowest correlation with the Canadian dollar, considered a commodity currency, in more than a month.

“Since June, the correlation with oil has fallen off a cliff,” Moore said. “It fits with historical patterns where strong crude rallies usually corresponds with a deterioration of the correlation.”

Crude oil, Canada’s biggest export, has remained above $100 since July 2, the longest stretch since May 2012.

The loonie has uptrend 0.2 percent this month versus nine developed-nation currencies tracked by the Bloomberg Correlation-Weighted Index. The yen relinquished 2.5 percent and the euro surrendered 0.4 percent.