Canada’s currency fell 2.2 percent for the week, the biggest loss since July, as commodities including crude oil fell. The loonie rallied the day before a government report showed employers of Canada and the U.S. added more jobs in April than economists forecast.

“We got that news out of Europe to speak about Greece may wish to leave the euro zone, and it’s taken a bit of the shine of the euro and add some risk sentiment,” said David Watt, a currency strategist senior fellow at the Royal Bank of Canada’s unit of RBC Capital Markets in Toronto. “It seems people are not confident that long against the Canadian dollar right now.” A long bet is to obtain the value of assets.

loonie, as the Canadian dollar is also known for the image of water birds in the C $ 1 coin, traded at 96.66 cents per U.S. dollar in Toronto at 17:03, compared with 96.69 cents yesterday, after collecting 1 percent earlier. One Canadian dollar bought $ 1.0346. The currency touched 94.46 cents on April 29, the strongest level since November 2007.

Contracts on crude oil fell for a fifth day, fell 1.7 percent to $ 98.14 per barrel in New York. Canada is the largest crude oil supplier to the U.S., the world’s largest economy.
Loonie Versus Euro

Canadian dollar rose 1.6 percent to C $ 1.3839 against the euro, appreciated 0.7 percent to 83.43 yen and was little changed at C $ 1.582 versus the pound.

Canadian bonds fell, pushing the yield on 10-year up one basis point, or 0.01 percentage point, to 3.19 percent. Price 3.25 percent security due June 2021 fell 7 cents to C $ 100.51.

Employers added 58,300 net jobs in April after a decline in 1500 in the previous month, Statistics Canada said. The median forecast of 25 economists in a Bloomberg News survey was for an increase 20,000. The unemployment rate suddenly dropped to 7.6 percent.

“The explosion of numbers,” said Blake Jespersen, director of foreign exchange at Bank of Montreal, said by phone from Toronto in Canada’s advantage in the job. “If commodity prices to stabilize, the market will be key in this number and continue to take the loonie higher.”

U.S. payrolls rose by 244,000 workers last month after a revised 221,000 in March, the Labor Department reported. The median forecast of 86 economists in a Bloomberg News survey was for a gain of 185,000. The unemployment rate suddenly rose to 9 percent.

Debt Greek Riots

The greenback rose against most major partner as the two European officials familiar with the situation said the European financial officials met in Luxembourg for a meeting scheduled to discuss possible proposals for restructuring the debt of Greece.

A German official said the discussions would include the German paper on options to deal with growing debt burden Greece, which has prompted speculation by investors that the restructuring of a possible outcome.

Earlier, Spiegel magazine reported that the ministers held an emergency meeting after Greece threatened to withdraw from the euro area. Greece rejected the report, according to finance ministry statement and the chief spokesman for German Chancellor Angela Merkel “categorically” denied that any discussion on out Greek place. He declined to comment when asked whether official meeting tonight.

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.

Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. At the same time, more Americans will probably lose their homes as companies cut payrolls, indicating a rebound will be slow to take hold.
“More and more buyers are becoming convinced that there is not a lot of downside left in the housing market,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We can count on housing no longer being a drag. The economic recovery is on track.”
Stocks jumped and Treasury securities dropped after the report added to evidence the housing market was turning. The Standard & Poor’s 500 Index closed up 1.9 percent at 1,026.13 in New York. The S&P builder supercomposite index was up 3.6 percent. The yield on the 10-year note jumped to 3.57 percent at 5 p.m. from 3.43 percent late yesterday.

Exceeds Forecast
Existing home sales were forecast to rise to a 5 million annual rate, according to the median forecast of 64 economists in a Bloomberg News survey. Estimates ranged from 4.8 million to 5.25 million. June’s pace was unrevised at 4.89 million.
Sales had reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.
Purchases of existing homes increased 5 percent compared with a year earlier. The median price dropped to $178,400 from the $210,100 in July 2008.
“We are bouncing back,” Lawrence Yun, the NAR’s chief economist, said in a press conference. Even so, “we still need to wait until year-end before we see price stabilization.”
The number of previously owned unsold homes on the market jumped 7.3 percent to 4.09 million in July, a “notable” increase that exceeded the historical average for the month, according Yun. Sellers who were waiting for the market to turn may now be putting their houses up for sale, he said.
At the current sales pace, it would take 9.4 months to sell those houses, the same as in June. A seven months’ supply is usually consistent with stabilization in prices, Yun said last month.

Distressed Sales
The share of homes sold as foreclosures or otherwise distressed properties held at 31 percent in July, he said.
Today’s report showed sales of existing single-family homes increased 6.5 percent to an annual rate of 4.61 million. Sales of condominiums and co-operatives climbed 13 percent to a 630,000 rate.
Purchases increased in three of four regions, led by a 13 percent jump in the Northeast.
The figures are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new-home sales, recorded when a contract is signed, a more timely barometer of the market.
The Commerce Department may report next week that purchases of new houses rose in July to the highest level since November, according to the Bloomberg survey.

Cutting Costs
Home Depot Inc., the largest home-improvement retailer, is among businesses cutting costs to ride out the housing recession. The Atlanta-based company reported second-quarter profit that fell less than analysts estimated and raised its annual earnings forecast after trimming expenses, even as it projected a sales decline for the year.
“Performance across most of our regions is better,” Chief Executive Officer Frank Blake said on a conference call with analysts on Aug. 18. “But caution is still appropriate,” and “we remain concerned by the high level of foreclosure activity,” he said.
About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week. By putting more homes on the market, foreclosures are keeping inventory higher than levels consistent with stable prices.
Obama administration efforts to revive housing include an $8,000 federal tax credit for first-time buyers who complete the transaction before Dec. 1. The government also is offering lenders incentives to modify the terms of delinquent mortgages, and the Federal Reserve is buying mortgage-backed securities to help reduce borrowing costs.

The FOMC kicked-off its two-day monetary policy meeting today and will be announcing its decision on Wednesday afternoon at 2.15 PM. The Fed is not seen changing interest rates from its current range of 0-0.25%. However, with the Treasury’s purchase plan set to expire in September, it will be interesting to see how the Fed will tackle the issue of extending the plan or permitting it to expire.