The Canadian dollar extended gains to hit a new one-year high against the U.S. dollar as oil prices surged and in the wake of strong Canadian jobs data late last week.
The Canadian dollar rose has high as 97.39 U.S. cents early Tuesday morning, and was trading around 97.15 U.S. cents at 8:10 a.m.
The Canadian dollar continued to get a boost from strong demand for oil and other commodities, as well as Canada's relatively robust economy compared to its still-ailing neighbour to the south.
As long as U.S. policymakers keep interest rates near zero, the Canadian dollar and many other currencies such as the euro are likely to keep on their upward trajectory, with the loonie possibly reaching parity with its U.S. counterpart by the end of the year, currency analysts said.
"The rebound in commodity prices in general has been really helpful to the Canadian dollar," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut. "It's also benefited from U.S. dollar weakness based on the fact that U.S. policymakers have rolled out a red carpet of easy money as far as the eye can see."
With benchmark interest rates at close to zero in the United States, investors have turned to currencies in countries with stronger yields, including Canada which is only marginally better.
Although trade in global currency markets was lacklustre with holidays in Canada, the United States and Japan, the Canadian dollar continued to get a boost from strong demand for oil and other commodities, as well as Canada's relatively robust economy compared to its still-ailing neighbour to the south.
As long as U.S. policymakers keep interest rates near zero, the Canadian dollar and many other currencies such as the euro are likely to keep on their upward trajectory, with the loonie possibly reaching parity with its U.S. counterpart by the end of the year, currency analysts said.
"The rebound in commodity prices in general has been really helpful to the Canadian dollar," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut. "It's also benefited from U.S. dollar weakness based on the fact that U.S. policymakers have rolled out a red carpet of easy money as far as the eye can see."
With benchmark interest rates at close to zero in the United States, investors have turned to currencies in countries with stronger yields, including Canada which is only marginally better.
With U.S. policymakers continuing to grapple with rising unemployment, they aren't expected to raise interest rates. That means a rate hike might not come before the second half of next year and perhaps not before 2011, analysts said.
Canada, on the other hand, posted better-than-expected jobs data last week, an improvement that could lead the country to raise interest rates much sooner than the U.S. Though any move to raise interest rates ahead of the U.S. could boost the loonie even further and scorch Canada's export oriented economy.
Australia already has raised interest rates and Norway is expected to follow suit as both countries benefit from rising commodity prices.
After reaching a high of 96.92 U.S. cents early on Monday, the Canadian dollar hovered around U.S. 96.62 by 6 p.m. eastern time Monday evening. Powered by surging commodity prices back in September 2007, the loonie reached par with the U.S. dollar for the first time in three decades. It was worth more than $1.10 less than a couple months later. The currency fell back against the U.S. dollar as the financial crisis deepened and commodity prices dropped.
Although there has been much speculation lately that the U.S. dollar is losing its status as a worldwide reserve currency, many currency analysts don't buy the notion.
"Remember esperanto? People thought that was going to be a world language," said Marc Chandler, chief currency strategist for Brown Brothers Harriman in New York. "I think the dollar and the U.S. empire are going to prove themselves a lot more durable."
The world also lacks a suitable substitute for a global reserve currency right now, analysts said.
"There is just no other money market in the world that is as liquid as the United States," said Axel Merk, portfolio manager of the Merk Hard Currency Fund in San Francisco. "Canada and the euro zone are not as deep and as liquid. That doesn't mean it won't happen over time." policymakers continuing to grapple with rising unemployment, they aren't expected to raise interest rates. That means a rate hike might not come before the second half of next year and perhaps not before 2011, analysts said.
Canada, on the other hand, posted better-than-expected jobs data last week, an improvement that could lead the country to raise interest rates much sooner than the United States. Though any move to raise interest rates ahead of the United States could boost the loonie even further and scorch Canada's export oriented economy.
Australia already has raised interest rates and Norway is expected to follow suit as both countries benefit from rising commodity prices.
Powered by surging commodity prices back in September 2007, the loonie reached par with the U.S. dollar for the first time in three decades. It was worth more than US$1.10 less than a couple months later. The currency fell back against the U.S. dollar as the financial crisis deepened and commodity prices dropped.
Although there has been much speculation lately that the U.S. dollar is losing its status as a worldwide reserve currency, many currency analysts don't buy the notion.
"Remember esperanto? People thought that was going to be a world language," said Marc Chandler, chief currency strategist for Brown Brothers Harriman in New York. "I think the dollar and the U.S. empire are going to prove themselves a lot more durable."
The world also lacks a suitable substitute for a global reserve currency right now, analysts said.
"There is just no other money market in the world that is as liquid as the United States," said Axel Merk, portfolio manager of the Merk Hard Currency Fund in San Francisco. "Canada and the euro zone are not as deep and as liquid. That doesn't mean it won't happen over time."
The Canadian dollar rose has high as 97.39 U.S. cents early Tuesday morning, and was trading around 97.15 U.S. cents at 8:10 a.m.
The Canadian dollar continued to get a boost from strong demand for oil and other commodities, as well as Canada's relatively robust economy compared to its still-ailing neighbour to the south.
As long as U.S. policymakers keep interest rates near zero, the Canadian dollar and many other currencies such as the euro are likely to keep on their upward trajectory, with the loonie possibly reaching parity with its U.S. counterpart by the end of the year, currency analysts said.
"The rebound in commodity prices in general has been really helpful to the Canadian dollar," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut. "It's also benefited from U.S. dollar weakness based on the fact that U.S. policymakers have rolled out a red carpet of easy money as far as the eye can see."
With benchmark interest rates at close to zero in the United States, investors have turned to currencies in countries with stronger yields, including Canada which is only marginally better.
Although trade in global currency markets was lacklustre with holidays in Canada, the United States and Japan, the Canadian dollar continued to get a boost from strong demand for oil and other commodities, as well as Canada's relatively robust economy compared to its still-ailing neighbour to the south.
As long as U.S. policymakers keep interest rates near zero, the Canadian dollar and many other currencies such as the euro are likely to keep on their upward trajectory, with the loonie possibly reaching parity with its U.S. counterpart by the end of the year, currency analysts said.
"The rebound in commodity prices in general has been really helpful to the Canadian dollar," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut. "It's also benefited from U.S. dollar weakness based on the fact that U.S. policymakers have rolled out a red carpet of easy money as far as the eye can see."
With benchmark interest rates at close to zero in the United States, investors have turned to currencies in countries with stronger yields, including Canada which is only marginally better.
With U.S. policymakers continuing to grapple with rising unemployment, they aren't expected to raise interest rates. That means a rate hike might not come before the second half of next year and perhaps not before 2011, analysts said.
Canada, on the other hand, posted better-than-expected jobs data last week, an improvement that could lead the country to raise interest rates much sooner than the U.S. Though any move to raise interest rates ahead of the U.S. could boost the loonie even further and scorch Canada's export oriented economy.
Australia already has raised interest rates and Norway is expected to follow suit as both countries benefit from rising commodity prices.
After reaching a high of 96.92 U.S. cents early on Monday, the Canadian dollar hovered around U.S. 96.62 by 6 p.m. eastern time Monday evening. Powered by surging commodity prices back in September 2007, the loonie reached par with the U.S. dollar for the first time in three decades. It was worth more than $1.10 less than a couple months later. The currency fell back against the U.S. dollar as the financial crisis deepened and commodity prices dropped.
Although there has been much speculation lately that the U.S. dollar is losing its status as a worldwide reserve currency, many currency analysts don't buy the notion.
"Remember esperanto? People thought that was going to be a world language," said Marc Chandler, chief currency strategist for Brown Brothers Harriman in New York. "I think the dollar and the U.S. empire are going to prove themselves a lot more durable."
The world also lacks a suitable substitute for a global reserve currency right now, analysts said.
"There is just no other money market in the world that is as liquid as the United States," said Axel Merk, portfolio manager of the Merk Hard Currency Fund in San Francisco. "Canada and the euro zone are not as deep and as liquid. That doesn't mean it won't happen over time." policymakers continuing to grapple with rising unemployment, they aren't expected to raise interest rates. That means a rate hike might not come before the second half of next year and perhaps not before 2011, analysts said.
Canada, on the other hand, posted better-than-expected jobs data last week, an improvement that could lead the country to raise interest rates much sooner than the United States. Though any move to raise interest rates ahead of the United States could boost the loonie even further and scorch Canada's export oriented economy.
Australia already has raised interest rates and Norway is expected to follow suit as both countries benefit from rising commodity prices.
Powered by surging commodity prices back in September 2007, the loonie reached par with the U.S. dollar for the first time in three decades. It was worth more than US$1.10 less than a couple months later. The currency fell back against the U.S. dollar as the financial crisis deepened and commodity prices dropped.
Although there has been much speculation lately that the U.S. dollar is losing its status as a worldwide reserve currency, many currency analysts don't buy the notion.
"Remember esperanto? People thought that was going to be a world language," said Marc Chandler, chief currency strategist for Brown Brothers Harriman in New York. "I think the dollar and the U.S. empire are going to prove themselves a lot more durable."
The world also lacks a suitable substitute for a global reserve currency right now, analysts said.
"There is just no other money market in the world that is as liquid as the United States," said Axel Merk, portfolio manager of the Merk Hard Currency Fund in San Francisco. "Canada and the euro zone are not as deep and as liquid. That doesn't mean it won't happen over time."
