The Thomson Reuters/Jefferies CRB Index advanced 0.4 percent. Silver and coffee posted the biggest gains. The commodities rally, as the analysts predicted, and commodity currencies, including the Aussie, follow them. Credit Suisse AG predicted that the Reserve Bank of New Zealand will increase the interest rates by 48 basis points over the next 12 months.

China, the biggest trading partner of Australia, subdued the strength of the Australian dollar, though. The country increased the reserve requirements for lenders to rein the inflation and prevent asset bubble.

AUD/USD closed at 1.0144 after opening at 1.0118 and falling to 1.0088. Meanwhile, EUR/AUD advanced from 1.3447 to 1.3487. AUD/JPY closed at 84.28, almost at its opening level of 84.27.

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Suncor Energy Inc., Canada’s biggest energy company, gained 3.1 percent as crude oil futures reached their highest point this year. Teck Resources Ltd. advanced 1.7 percent as zinc and copper climbed. Barrick Gold Corp., the world’s largest gold producer, added 1.6 percent.
“The market’s tone is driven by improving economic data, specifically in Europe,” said Andrew McCreath, a portfolio manager at Sentry Select Capital Corp. in Toronto, which manages about C$4 billion. “The world is back to thinking that it’s synchronous growth; if one guy improves, the other guy’s going to improve.”

The Standard & Poor’s/TSX Composite Index advanced 130.67 points, or 1.2 percent, to 10,831.18. The equity benchmark has risen 21 percent this year as commodity prices rebounded on signs the global economy is recovering from the first simultaneous recessions in the U.S., Europe and Japan since World War II.

Oil climbed to a 10 month high today as the euro strengthened against the dollar after German services and French manufacturing expanded in August, bolstering the appeal of commodities to investors.

Record Increase

Sales of existing U.S. homes rose 7.2 percent to a 5.24 million annual rate, the highest since August 2007, the National Association of Realtors said in Washington. The gain was the biggest since records began in 1999.

Crude oil for October delivery increased 1.3 percent to $73.89 a barrel in New York.

Suncor gained 3.1 percent to C$35.53 to contribute the most to the S&P/TSX’s rally. Petrobank Energy and Resources Ltd. led energy companies with a 6.9 percent surge to C$40.29, its highest price since September.

The weakening U.S. dollar boosted gold prices, which tend to rise as the U.S. dollar falls. Gold futures for December delivery climbed 1.4 percent to $954.70 an ounce in New York.

Barrick added 1.6 percent to C$37.60, for a weekly gain of 0.6 percent. The second-largest gold producer, Goldcorp Inc., rose 1.2 percent to C$38.84. Kinross Gold Corp. jumped 2.5 percent to C$20.99.

Silver Producers

Silver Wheaton Corp., Pan American Silver Corp. and Silver Standard Resources Inc. each gained at least 2.8 percent as silver for September delivery increased 2.1 percent in New York.

Copper for December delivery gained 5.1 percent to $2.89 a pound in New York, while zinc, nickel and lead rose in London.

Teck Resources, Canada’s largest base-metals producer, rallied 1.7 percent to C$28.88. Equinox Minerals Ltd., which mines copper in Zambia, climbed 2.3 percent to C$2.66.

“The weaker U.S. dollar decreases the price of commodities for buyers of commodities outside the United States,” McCreath said. “There’s a belief that it has a tendency to increase demand, and as a result commodity prices go up.”

Energy and raw-materials companies make up 43 percent of the value of the TSX.

Economic Prospects

Shortly after trading began, U.S. Federal Reserve Chairman Ben S. Bernanke told a symposium that “the prospects for a return to growth in the near term appear good” both in the U.S. and internationally.

“We’ve got some good news from Germany, we’ve got some good news from France, we’ve got Bernanke saying the recession is over,” said Steven Conville, a Markham, Ontario-based portfolio manager at Blackmont Capital Inc., which manages about C$8 billion. With real-estate sales improving “from abysmal to horrible that makes for, on light volume, a positive buying day,” he said.

The S&P/TSX pared its losses for the week to 0.2 percent. The index dropped 316.42 points Aug. 17 after foreign direct investment in China fell and Japan’s economy grew less than economists estimated.

Contract manufacturer Celestica Inc. led the S&P/TSX with an 8 percent gain to C$9.60, its highest price since May 2008, after Citigroup increased its rating on the stock to “hold” from “sell.”

Only three stocks on the S&P/TSX lost more than 2 percent. New Gold Inc. plunged 5.8 percent to C$3.77, after a 5.8 percent gain from yesterday. The company said it would sell 26.7 million shares for C$3.75 apiece. New Gold had 356 million shares outstanding as of July 31.

Pharmaceutical-services company Patheon Inc. soared 31 percent to a 10-month high of C$3.38 after receiving an $460 million buyout offer from Lonza Group AG of Switzerland. Mississauga, Ontario-based Patheon isn’t on the S&P/TSX index.

Commodity currencies are the major losers today, with AUD/USD down from 0.8478 highs to 0.8300 and USD/CAD reaching 1.0948 from an intraday low of 1.0812. NZD/USD also fell after printing an 11-month high of 0.6884, and quotes around 0.6775