Canadian Dollar Stages Comeback

The Canadian dollar rose above 70 U.S. cents Friday for the first time in a month on expectations that investors overestimated the cooling effect that Asia’s weakness would have on the economy. Analysts also said the Bank of Canada will defend the currency if it plummets again.

The dollar gained for a sixth straight day, rising more than half a U.S. cent to 70.09 cents before retreating. It settled at 69.91 cents, up from 69.57 cents Thursday. The dollar has gained more than a full cent in value since last Friday’s 50 basis-point interest rate rise by the central bank.

A week ago, the dollar slid to its fifth record-low Bank of Canada official close of 68.20 cents as investors concluded that the central bank wouldn’t raise rates to protect the beleaguered currency. Higher rates make the dollar more attractive.