The Canadian dollar saw a large jump on Wednesday due to month-end rebalancing and relief felt after the European Central Bank's long-term refinancing operation, The Wall Street Journal reports.
The loonie extended its gains amid data that indicated the U.S. economy grew more than analysts predicted as the recovery gained traction in the final quarter of 2011. The U.S. dollar dropped to $0.9873 Canadian dollars from C$0.9955 on Tuesday, reports show.
According to Bloomberg, the currency gained against all 16 of its most-traded counterparts.
"We seem to have seen a large amount of Canadian-dollar buying related to month-end," said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank’s TD Securities unit. "It may also reflect the fact that the market is less leveraged to the Canadian dollar than say, the Australian or New Zealand dollars. When times are good, the Canadian dollar may not do as well, but when we hit a speed bump, it holds up."
The Journal reports the advances also came as data showed that 56.6 percent of Canada's increase in capital spending this year will be supported by the mining industry and the oil and gas sectors, including Alberta oil sands projects.
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