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From Staff Reports
The Canadian dollar rose to parity against the U.S. dollar for the first time since 1976 yesterday (Thursday), supported by surging oil prices and broad weakness in the greenback, the Financial Times reported.
RBC Capital Markets analyst Adam Cole expects the Canadian dollar to continue its upward trajectory. The reason: "Canada produces the commodities the world wants – it is still the number one commodity play among major currencies." Cole said.
What's more, Cole said, the Bank of Canada is welcoming the currency's strength. Prevented from boosting interest rates by the global credit crunch, the rise of the Canadian dollar has helped that nation's central bank in its battle against inflationary pressures.
Late in New York yesterday, the Canadian dollar surged 1.4% C$1.0012 against the American greenback.
In other trading, the U.S. dollar also dropped against the European euro – to a record low through the $1.40 level – as the dollar continued its skid on the heels of the U.S. Federal Reserve's decision to cut interest rates by half a percentage point on Tuesday. Traders told the FT that the euro's rise through the psychologically important $1.40 level – a "pain barrier" for eurozone exporters – triggered a surge in stop-loss buying, shooting the euro even higher. The euro rose 0.8% to $1.4071 against the dollar.
The dollar fell 0.4% to $2.0093 against the British pound Sterling, skidded 1.5% against the yen to Y114.44, and fell 1% to SFr1.1717 against the Swiss franc, the FT said.
News and Related Story Links:
- The Financial Times: Dollar hits lows against major currencies.