Canadian Dollar Rises First Time in 3 Days as Investor Risk Aversion Drops

The Canadian dollar increased for the first time in three days against its U.S. counterpart as crude oil prices rose and investor risk aversion eased.

Canada’s dollar, also known as the loonie, remained higher after a government report showed the annual inflation rate was unchanged in November, as rising food and automobile prices offset lower costs for gasoline.

The loonie gained 0.5 percent to C$1.0336 per U.S. dollar at 7:16 a.m. Toronto time. It touched C$1.0424 on Dec. 14, the weakest level this month. One Canadian dollar buys 96.75 U.S. cents.

Futures on crude oil, Canada’s biggest export, rallied 0.9 percent to $94.90 a barrel in New York. Futures on the Standard & Poor’s 500 Index increased 0.8 percent.

The consumer price index rose 2.9 percent in November from a year earlier, Statistics Canada said today in Ottawa, matching the median of 22 forecasts in a Bloomberg News survey of economists. On a monthly basis, consumer prices rose 0.1 percent in November, also in line with economist expectations, down from a 0.2 percent pace in October.

Bank of Canada policy makers have kept the bank’s key interest rate at 1 percent since September 2010. Lower interest rates make a country’s currency less attractive to foreign investors.

Although Europe’s widening debt crisis is raising risks to the global economy, there is “considerable monetary stimulus” in Canada with interest rates near historic lows and the financial system “functioning well,” policy makers led by Bank of Canada Governor Mark Carney said in a Dec. 6 statement.