14 October 2009

Analysts see dollar at parity soon

The following article is extracted from the 14 October 2009 edition of “globeandmail.com”.

The Canadian dollar surged again Wednesday, moving well above 97 cents (U.S.) as the U.S. currency continued to sink.

The dollar rose to 97.27 cents, up 0.79 of a penny, as a weakening greenback, higher commodity prices and a stronger economic outlook drove it higher.

Many currency strategists believe parity could be reached within days….

The Canadian dollar has risen 3.2 per cent in the past five days and 18.2 per cent in the past six months….

Wednesday's move came as traders continued to shed the greenback. Upbeat earnings reports and signs of strong global trade mean investors' appetite for risk has returned – and that means buying loonies, Australian dollars and euros….

Attention will soon sharpen on the Bank of Canada, which will announce its interest-rate decision next Tuesday followed by a monetary policy report Thursday. The central bank is expected to keep rates on hold and may well comment on the threat of the currency's rapid rise to an economic recovery….

The Canadian dollar was also higher against the euro, yen and New Zealand dollar Wednesday. One euro buys $1.53 (Canadian).