Russia sparks rally in Canadian dollar

The Canadian dollar rose more than a cent Wednesday after the Russian central bank signalled it plans to diversify some of its reserves into the currency.

The loonie rose to 95.57 cents US from yesterday's close of 94.52 cents.

The currency "has surged higher on the news that the Russian central bank is preparing to invest some of its foreign exchange reserves in Canadian dollars," said Bank of Nova Scotia currency analysts in a morning note.

The move also came as the U.S. dollar buckled against most other major currencies.

Russia has gradually been diversifying its $400-billion-plus reserves – the world's third largest – to reduce dependence on the U.S. dollar.

"Technical preparations are under way for operations with Canadian dollars. Then there could be a couple of other currencies and this will be it," Russian central bank official Sergei Shvetsov said.

The Canadian currency has rise 16.7 percent this year against the greenback, one of the world's top-performing currencies.

With files from Reuters

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