Loonie ends higher, posts 16 percent rise for 2009

Thu Dec 31, 2009 4:40pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Ka Yan Ng

TORONTO (Reuters) - The Canadian dollar finished the year on a firm note against the U.S. greenback on Thursday, supported by stronger oil prices in light trade, and market players predicted momentum for the currency in the new year.

The Canadian dollar finished higher for a second straight month, ending at C$1.0510 to the U.S. dollar, or 95.15 U.S. cents. That is up from C$1.0553 to the U.S. dollar, or 94.76 U.S. cents, at Wednesday's close.

For the year, the currency is up 15.9 percent versus the U.S. dollar, rebounding from its 18.6 percent drop in 2008, which was its worst showing against the U.S. dollar in any year since at least 1950.

Many currency players say the Canadian dollar is poised to climb further early in the new year alongside an improving economy and global outlook, as well as commodity price gains.

Scotia Capital is among foreign exchanges desks that expect the Canadian dollar will reach par with the U.S. dollar in 2010. The Canadian dollar made a run to parity this year, reaching as high as 97.97 U.S. cents, during its long march from its March low of 79.28 U.S. cents. The last time it hit par with the greenback was mid 2008.

"The fundamentals in Canada are strong. Sentiment is bullish Canada, and on a relative basis, Canada should do very well with stronger commodity prices and ongoing U.S. economic recovery," said Camilla Sutton, currency strategist at Scotia Capital.

On Thursday, the currency rebounded after it fell briefly on data that showed weekly U.S. jobless claims hit a 17-month low.

It dropped to 95.02 U.S. cents after the claims data, which lifted hopes for U.S. economic recovery and gave the greenback a shot in the arm. But the Canadian dollar snapped back in a thin market, helped by an oil price that held above $79 a barrel, and rose to a session high of 95.64 U.S. cents.   Continued...

<p>A Canadian one dollar coin, also know as a loonie, is shown in Montreal in this April 28, 2006 file photo. REUTERS/Shaun Best</p>