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Canadian Dollar Touches 8-Week High on Federal Reserve Stimulus

Dec. 12 (Bloomberg) -- The Canadian dollar touched an almost eight-week high against its U.S. counterpart before a Federal Reserve policy statement forecast to bring a new round of asset purchases to help drive the U.S. economy.

Canada’s dollar gained for a seventh day as the U.S. central bank prepared to release a policy statement at around 12:30 p.m. in Washington, followed by forecasts for growth, unemployment and inflation, and a press conference from Chairman Ben Bernanke at 2:15 p.m. The statement is expected to outline $45 billion in monthly Treasury buying as part of the bank’s quantitative-easing strategy to stimulate job growth, according to a Bloomberg survey of 49 economists. Oil, Canada’s leading export, gained with global stocks.

“Most of the focus right now is on anticipation over Fed policy and what the Fed will announce today, so I think the expectation is they expand QE3 to buying Treasuries” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia by phone from Toronto. “That would weigh on the U.S. dollar over time, so I think generally risk assets are a bit higher.”

The loonie, as the Canadian currency is known for the image of the aquatic bird on the C$1 coin, rose 0.1 percent to 98.55 cents per U.S. dollar at 8:14 a.m. in Toronto today, after touching 98.53, the strongest since Oct. 19. One Canadian dollar buys $1.0147.

Crude-oil futures rose 0.8 percent to $86.47 a barrel in New York. The MSCI World Index of stocks increased 0.2 percent.

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