TORONTO (Bloomberg) — Canada's dollar rose to a one-week high, following its biggest annual drop on record, as prices of crude oil, natural gas and nickel advanced.

The currency climbed one percent this week against its US counterpart as the Reuters/Jefferies CRB Index of 19 raw materials advanced for the first time in three weeks. Commodities account for about half of Canada's export revenue.

"Commodities have been bid in the small amount of trading we've had this week," said Dustin Reid, director of currency strategy at RBS Global Banking & Markets in Chicago, on Friday. "You've seen the Canadian dollar catching up a bit on higher commodity prices."

Canada's dollar gained to C$1.2103 this week from C$1.2219 on December 26. It touched C$1.2067 yesterday, the strongest level since December 25. One Canadian dollar buys 82.63 US cents. The loonie, as the currency is known, may fall to C$1.25 next week if a worse-than-expected US unemployment report leads to a resumed sell-off in commodities, according to Reid.

The loonie fell 18 percent against the US dollar in 2008, the biggest annual decline since at least 1972, the start of Bloomberg data. The global recession cut demand for commodities, which account for about half of Canada's export revenue.

Crude oil for February delivery climbed 23 percent this week to $46.22 a barrel on the New York Mercantile Exchange. Futures dropped almost 70 percent from a record high of $147.27 a barrel on July 11. Crude is the largest component of the Bank of Canada's Commodity Price Index, accounting for 21 percent.

The Reuters/Jefferies CRB Index, which includes raw materials such as crude oil, gold, nickel and natural gas, climbed 8.7 percent last week to 233.92. The gauge dropped 36 percent last year.

"We're probably seeing some optimism that things in 2009 will improve," said Kate Warne, a market strategist at Edward Jones & Co. in St. Louis.