Canadian Dollar Holds Above 83 U.S. Cents for a Second Week

Nov. 13 (Bloomberg) -- Canada's dollar held above 83 U.S. cents for the second straight week on speculation the Bank of Canada will boost its target interest rate next month and during the coming year.

The currency also strengthened as traders sold U.S. dollars on signs the Bush administration isn't worried about its slide. Lehman Brothers Holdings Inc. yesterday raised its year-end 2005 forecast for the Bank of Canada's target rate to 4 percent, from 3.5 percent previously. The target is now 2.50 percent.

``We foresee continued Canadian dollar strength,'' pushing the currency up to 87 U.S. cents by the end of next year as interest rates rise, said John Shin, a Lehman economist in New York who covers Canada and the U.S.

Canada's dollar rose 0.4 percent this week to 83.85 U.S. cents in Toronto, from 83.50 U.S. cents. One U.S. dollar bought C$1.1926. Canada's currency reached 84.01 cents, a 12-year high, on Nov. 8. It held above 83 cents for six straight days, and strengthened for 15 of the past 20 weeks.

Bloomberg