Canada to overtake US currency as Fed switch on printing press

OTTAWA, Sept 18, 2007 (AFP) – The Canadian dollar reached a 30-year high Tuesday, nearing parity with the US greenback after the US Federal Reserve cut its key interest rate.

The loonie closed at 0.9864 US dollars, after touching 0.9874 US in the day’s trading, its highest level since January 1977, according to the Bank of Canada.

One US dollar would thus buy 1.0138 Canadian dollars.

Following a week of gains in anticipation of a US interest rate cut and record oil prices, the surge came after the US Federal Reserve reduced its key lending rate by half a point to 4.75 per cent.

The US paring was double the quarter point economists had expected.

Analysts now say the Canadian dollar could reach parity with the US dollar in the coming days or weeks, already up 13.9 percent this year against the greenback. In the past half decade, the loonie was highest in August 1957, at 1.0613 US, and lowest in January 2002, at 0.6202 US.