NEW YORK — Canada's dollar was worth more than the U.S. greenback yesterday for the first time since July 2008 on the back of the rising price of crude oil and the prospect of higher interest rates.
Canada's dollar, dubbed the loonie for the aquatic bird on the Canadian $1 coin, last traded through parity with the U.S. dollar on July 22, 2008, 11 days after crude, the country's biggest export, reached a record $147.27 a barrel. Oil traded near a 17-month high yesterday.
"As we trade around it and move through it, the parity level becomes much less of a target and more of an accepted norm," said Sacha Tihanyi, a currency strategist in Toronto at Bank of Nova Scotia, Canada's third-largest bank. "Everything continues to be in line for Canadian dollar strength."
The currency traded at $1.0001 Canadian yesterday in Toronto, compared with $1.0022 Canadian Monday. One Canadian dollar buys 99.99 U.S. cents.
The loonie traded on a one-for-one basis with the U.S. currency in September 2007 for the first time in three decades, capping a five-year run on the back of booming demand for the nation's commodities.
Canada, the largest trading partner of the United States, has benefited from rising demand for copper, gold, wheat and oil from the U.S. and emerging economies such as India and China. The country is the world's largest producer of uranium, the second-biggest exporter of natural gas, and sits on the largest pool of oil reserves outside the Middle East. Canada is also the world's second-largest exporter of wheat.
Canada is on course to be the first Group of Seven nation to erase its budget gap after the global financial crisis. Finance Minister Jim Flaherty presented on March 4 a budget that forecasts the budget deficit narrowing to $1.8 billion Canadian in 2014 from a record $53.8 billion Canadian last year.
