Canadian Dollar's Value At 30-year High Options

[André]

Updated Fri. Sep. 14 2007 1:55 PM ET

CTV.ca News Staff

For the first time in three decades, the loonie was temporarily worth more than 97 cents US.

After closing Thursday at 96.83 cents, the currency rose as high as 97.23 cents. Mid-morning, the dollar slipped to 96.94 cents. The intraday high on Thursday was 96.98 cents -- a peak that has not been seen since 1977.

"The strength of the oil and gas market, the resource sector, is helping to lift the Canadian dollar," BNN's Michael Kane told CTV Newsnet on Friday.

"The expectation that the United States Central Bank, the U.S. Federal Reserve, will cut interest rates while we keep rates where they are gives the differential in our favour."

Kane said there are "many factors" pushing the dollar higher.

Reports of mediocre U.S. retail sales and industrial production influenced the loonie's value. Retail sales in the U.S. rose 0.3 per cent in August when compared to July. Analysts had expected a jump of 0.5 per cent.

U.S. industrial output rose 0.2 per cent in August, amid forecasts it would jump 0.3 per cent.

In comparison, Canada's manufacturing shipments rose 2.3 per cent, hitting $50 billion in July, Statistics Canada reported Friday. That latter number is the highest level since March.

Shipments had slipped two per cent in June, but a more normal level of output from the auto sector helped push the numbers back up.

Shaun Osbourne, the chief currency strategist with TD Securities, says that foreign investment in the Canadian resource sector has also helped the loonie push upwards.

"What we have here in Canada is a lot of stuff in the ground that that people really want, oil and other natural resources. So we have seen a tremendous in-flow of investment money into the Canadian resource sector over the last few years. That helped the Canadian dollar strengthen."

Some analysts say the soaring loonie could now reach parity with the U.S. dollar within a month or two. BNN's Michael Hainsworth says this has more to do with the weakness of the greenback than the strength of the loonie.

"There is increasing chatter of a recession stateside, and that's got foreigners selling the greenback and looking for a place to put their money," Hainsworth told CTV Toronto.

"An economy firing on all cylinders like ours is a popular destination."

I remember just a few years ago the Canadian dollar was worth only 62cents American...

[lunk]

1:1=amero * ?

Anyone have any idea what the
exchange rate might be?

[Sanders]

No idea.

But the pictures of the already coined Amero are dated 2007. Will we have a new currency in the next few months??

Expecting the worst - but I'm hoping that a lot of people will wake up and say no.

[lunk]

Canada, where everybody
works for the loonie.