The Canadian dollar rose above $1.10 Wednesday before easing back some 2 cents to a close that was still high by historical measures.

The currency -- nicknamed the loonie because the Canadian dollar coin the bears an image of a common loon, a well-known Canadian bird, on its reverse side -- jumped 1.79 cents to $1.1031 Wednesday morning on news Chinese officials said they wanted to diversify their $1.43 trillion of foreign-exchange reserves away from the U.S. greenback.

But the high-water mark -- the fourth straight day the loonie set a modern-day record -- was short-lived, as the Canadian dollar slipped back to $1.0931 by 10 a.m. EST and ended official trading in Toronto at $1.0775, down 0.77 cent from Tuesday's close.

"I've given up guessing in the short run," TD Bank Senior Economist Derek Burleton told CBC News.

"There's nothing, I don't think, that's going to keep the U.S. dollar from weakening further in the very near term," he said. "Given the speed of change, we could see a $1.15 US or $1.20 US (Canadian dollar)."

The loonie regained parity with the greenback in September and has set new records since Oct. 31, when it topped its previous modern-day high of $1.0614, dating from August 1957.

Since the start of the year, the Canadian dollar has risen about 24 cents.  // Copyright 2007 by United Press International



Publication date: 08 November 2007   

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