greeny
09-23-2007, 01:00 AM
TORONTO — The Canadian dollar moved decisively above 99 cents US Thursday morning, coming within a hair’s breadth of parity against the faltering American dollar for the first time since November 1976.
The currency moved up as high as 99.99 cents US at 9:15 a.m. EDT, according to the Bank of Montreal (TSX:BMO), before easing back slightly to 99.75 cents, up 1.25 cents from Wednesday. It had opened at 99.42 cents US.
The loonie, which has been gaining on its American counterpart since bottoming out below 62 cents in early 2002, has recently been on a spectacular run, up from 95 cents at the start of September and from under 90 cents last spring.
The currency advanced 1.38 cents Tuesday after the U.S. Federal Reserve cut short-term interest rates by half a percentage point, undercutting the attractiveness of the American currency. The loonie was also boosted as crude oil hit new highs solidly above US$80 a barrel.
“We’ve certainly got clear evidence that the Canadian economy was doing better than the U.S. economy,” observed David Watt, senior currency analyst at RBC Capital Markets.
“That sort of helped, oil prices helped a bit. This last run toward parity certainly required something else to really give it a push — and that is a strong developing idea that the U.S. economy, or that the U.S. dollar, is going to weaken further.”
American-dollar weakness is in evidence across most currencies, as the greenback slumped versus the euro, the British pound, the yen and Swiss franc.
It dropped to record lows Thursday against the euro, which rose above the US$1.40 level, the highest value for the European currency since its inception in 1999.
The spot gold price, meanwhile, topped US$730 an ounce to its highest level since February 1980, trading at US$730.70, up $10 on the day.
The currency moved up as high as 99.99 cents US at 9:15 a.m. EDT, according to the Bank of Montreal (TSX:BMO), before easing back slightly to 99.75 cents, up 1.25 cents from Wednesday. It had opened at 99.42 cents US.
The loonie, which has been gaining on its American counterpart since bottoming out below 62 cents in early 2002, has recently been on a spectacular run, up from 95 cents at the start of September and from under 90 cents last spring.
The currency advanced 1.38 cents Tuesday after the U.S. Federal Reserve cut short-term interest rates by half a percentage point, undercutting the attractiveness of the American currency. The loonie was also boosted as crude oil hit new highs solidly above US$80 a barrel.
“We’ve certainly got clear evidence that the Canadian economy was doing better than the U.S. economy,” observed David Watt, senior currency analyst at RBC Capital Markets.
“That sort of helped, oil prices helped a bit. This last run toward parity certainly required something else to really give it a push — and that is a strong developing idea that the U.S. economy, or that the U.S. dollar, is going to weaken further.”
American-dollar weakness is in evidence across most currencies, as the greenback slumped versus the euro, the British pound, the yen and Swiss franc.
It dropped to record lows Thursday against the euro, which rose above the US$1.40 level, the highest value for the European currency since its inception in 1999.
The spot gold price, meanwhile, topped US$730 an ounce to its highest level since February 1980, trading at US$730.70, up $10 on the day.