Canada dollar ends above parity for first time since 2008

Wed Apr 14, 2010 4:58pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar rallied to close above parity with the U.S. currency on Wednesday for the first time since May 2008, as upbeat U.S. earnings and strength in commodity prices enticed investors to embrace assets perceived to be riskier.

World stocks rallied on Wednesday and oil spiked 2 percent to settle above $85 a barrel on a surprise drawdown in U.S. crude inventories and optimism about the economic recovery.

Lifted by rallying equity and commodity markets, the Canadian dollar climbed as high as C$0.9953 per U.S. dollar, or $1.0047, its highest intraday level since June 2008.

The currency finished at C$0.9992 to the U.S. dollar, or $1.0008, up from Tuesday's close of C$1.0019 to the U.S. dollar, or 99.81 U.S. cents.

"To me it's pretty clear the trend is definitely in Canada's favor," said Firas Askari, head of foreign exchange trading at BMO Capital Markets.

U.S. corporate earnings proved to be a powerful catalyst, driving stock markets higher on Wednesday, with shares of Intel Corp, the world's largest chipmaker, rallying a day after it reported earnings and sales that trounced estimates [ID:nN1382801].

JPMorgan Chase & Co, the second-largest U.S. bank, notched gains after its profit topped estimates.

"We saw some real money types adding to their long, Canadian dollar positions," said Askari.   Continued...