C$ up for 9th straight session, hits 5-mth high

Wed Mar 10, 2010 5:12pm EST
 
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By Ka Yan Ng

TORONTO (Reuters) - The Canadian dollar ended stronger for a ninth straight session against the U.S. dollar after touching its highest level in almost five months on Wednesday, helped by talk it is set to test parity with the greenback.

Boosted by firm oil prices and the prospect of rising Canadian interest rates, the currency extended as high as C$1.0216 to the U.S. dollar, or 97.89 U.S. cents, before retreating.

It closed at C$1.0259 to the U.S. dollar, or 97.48 U.S. cents, up slightly from C$1.0264 to the U.S. dollar, or 97.43 U.S. cents, at Tuesday's close.

For the last nine sessions, the Canadian dollar has tested the stronger end of the roughly C$1.02 to C$1.07 trading band it has held for the past five months. Analysts said this may signal the Canadian dollar has momentum to head higher.

"If we look at the intraday lows (in U.S. dollar terms) during the last few days, everyday it's a lower low than the previous day, which suggest that there's still a willingness to take the Canadian dollar higher," said Matthew Strauss, senior currency strategist at RBC Capital Markets.

Market players are next eyeing the C$1.0207 level, the highest level reached in October, to set up a move toward parity with the greenback. The last time the Canadian dollar was on equal footing with the U.S. dollar was in July 2008.

Speculation the Canadian dollar will reach parity with the U.S. currency has increased recently.

CIBC World Markets forecast on Wednesday that the Canadian dollar would soar above par with the U.S. dollar by September, a reflection of its view that the Bank of Canada will hike interest rates a full six months ahead of the U.S. Federal Reserve.   Continued...

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