MONTREAL — The Australian dollar is being overtaken by the Canadian dollar among commodity currencies as the safety of Canada’s banking system and ties with the U.S. economy spur investors to buy the loonie.

Options show demand for the right to sell the so-called Aussie and buy the Canadian dollar reached the highest last month in almost a year. A measure of traders’ expectations for price fluctuations indicates the loonie is the most secure bet relative to the Australian dollar since July as the global recovery shows signs of wavering.

The loonie hit a seven-week high against the U.S. dollar on Monday as oil prices continued to rise amid signs of global economic improvement. It rose 0.27 cents to close at 97.31 cents U.S.

At the start of 2010, the Aussie and loonie approached parity with the greenback as the revival in U.S. growth spurred demand for Canada’s energy exports while China’s expansion supported Australia’s iron ore and coal. The Aussie lost momentum as China, the nation’s largest trading partner, restrained lending to cool its economy while crude oil, Canada’s biggest export, surged to $80 a barrel.

“There’s a tremendous amount of positive sentiment for Canada right now,” said Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia, the second-most accurate currency forecaster in the year and a half ended in June, according to data compiled by Bloomberg. “The Australian dollar has already benefited.”

Australia’s dollar was the best performer in 2009 against the United States among the 10 most-traded currencies. It rallied 28 per cent as the South Pacific nation skirted the global recession and its central bank became the first among the Group of 20 nations to boost borrowing costs.

Now, Australia’s currency may struggle as the pace of interest-rate increases slows and China’s imports of iron ore and copper fall short of last year’s record levels. While Chinese Premier Wen Jiabao affirmed a target of 8 per cent growth for 2010, the same goal the government set and surpassed in each of the past five years, People’s Bank of China Deputy Governor Su Ning said the central bank is concerned about rising commodity prices.

The Australian dollar fell to 92.56 Canadian cents on March 4 after appreciating 10.5 per cent last year in its biggest annual increase since 1994. It slid below the 200-day moving average against the loonie on Feb. 4 for the first time in a year and a half. The Australian dollar tumbled 21 per cent the last time it did so in August 2008.

The Aussie will drop to 91.35 Canadian cents by September, according to Richard Grace, chief currency strategist in Sydney at Commonwealth Bank of Australia, among the five most-accurate forecasters for the Aussie and loonie last year.

In addition to the Aussie and loonie, the New Zealand dollar, South Africa rand, Brazil real and Norwegian krone are considered commodity currencies. The rand has declined about 2.4 per cent this year versus the Canadian dollar, the real has fallen 4.4 per cent, while the kiwi is down 5.3 per cent and the krone off 3.8 per cent.

The bullish outlook for the loonie, as the Canadian currency is known for the image of the aquatic bird on the $1 coin, reflects an economy expanding faster than analysts forecast, a reduced budget deficit and a banking system that avoided a collapse or the need for public capital.

Canada is on course to be the first Group of Seven nation to erase its budget gap after the global financial crisis. Finance Minister Jim Flaherty anticipated last week that the deficit will narrow to $1.75 billion in 2014 from a record $52 billion last year.

The economy expanded at a 5 per cent annualized rate in the fourth quarter, the fastest pace since the third quarter of 2000. Australia’s grew 2.7 per cent from a year earlier, while the economy of the U.S., Canada’s largest trading partner, increased 5.9 per cent.

Canada’s financial system was named the soundest in the world for two consecutive years by the Geneva-based World Economic Forum. Toronto-Dominion Bank, Canada’s second-largest lender, Canadian Imperial Bank of Commerce, National Bank of Canada and Bank of Montreal all reported profits in the first quarter that beat analysts’ estimates.

Adding to the positive sentiment, Canada won 14 gold medals at the Olympics in Vancouver, the most by any country in the 86- year history of the Winter Games. The government contributed $22 million to the “Own the Podium” program to help elite athletes train.

“It’s one more thing that puts Canada on the radar screen,” said Bank of Nova Scotia’s Sutton, whose firm trailed only Germany’s Landesbank Baden-Wuerttemberg in Bloomberg’s ranking of 46 companies for currency forecasting.