Loonie hits one-year high, likely return to parity

The Canadian dollar rose to a one-year high Thursday even as the Bank of Canada warned once again that a strong loonie will undermine economic growth.

OTTAWA — The Canadian dollar rose to a one-year high Thursday even as the Bank of Canada warned once again that a strong loonie will undermine economic growth.

But with the world recovery from the recession gaining steam and supporting commodities that Canada has in abundance, the loonie appears to be headed for parity, and sooner than expected, economists say.

Douglas Porter of BMO Capital Markets said his bank’s official forecast is for the loonie to reach parity with the U.S. dollar on a sustained basis by middle of next year, but he conceded it could be sooner.

“Once markets focus on a target, they sometimes act like a dog with a bone,” Porter said.

The loonie has been gathering momentum for more than a week and had another strong day Thursday, gaining 0.91 cents to close at 95.04 U.S., the best showing since Sept. 29, 2008. It hit an intraday high of 95.18.

CIBC currency analyst Shane Enright said the mood of markets is similar to the updraft in the first half of 2007 that saw the loonie soar to US$1.10.

The Bank of Canada has been trying to talk the loonie down since at least June, and was at it again Thursday with senior deputy governor Paul Jenkins warning about the loonie’s affect on the economy in a speech in Vancouver.

“All else being equal, a persistently strong Canadian dollar would also reduce real growth,” he said.

Just Posted

Trudeau: no apologies for heckler encounter, pledges to call out ‘hate speech’

OTTAWA — Hate speech and the politics of division are creating a… Continue reading

Rocky Mountain House RCMP charge woman with drug trafficking

Rocky Mountain House RCMP have charged a woman with drug trafficking after… Continue reading

Officials report some headway on wildfires, but thick smoke hangs over B.C.

Wildfire crews report some headway was made over the weekend battling hundreds… Continue reading

WATCH: Central Albertans learn about farm life at Sunnybrook Farm Museum

Pioneer Days Festival in Red Deer Saturday-Sunday

Raising awareness for Bikers Against Child Abuse

Second annual Raise A Ruckus Against Child Abuse was held at the Red Deer Radisson Hotel Saturday

WATCH: Medicine River Wildlife Centre opens new playground

The grand opening of the playground was Saturday morning

Police chiefs want new data-sharing treaty with U.S. as privacy questions linger

OTTAWA — Canada’s police chiefs are pressing the Trudeau government to sign… Continue reading

Pope on sex abuse: “We showed no care for the little ones”

VATICAN CITY — Pope Francis issued a letter to Catholics around the… Continue reading

Ottawa announces $189M to extend employment insurance for seasonal workers

ESCUMINAC, N.B. — Ottawa has announced $189 million for an employment insurance… Continue reading

Trudeau formally announces he’ll run again in next year’s election

MONTREAL — Justin Trudeau will run again in the 2019 federal election.… Continue reading

Smoke from B.C. wildfires prompts air quality advisories across Western Canada

VANCOUVER — More smoky, hazy air is expected to blanket much of… Continue reading

Anti-pipeline protesters released days before weeklong jail sentences end

MAPLE RIDGE, B.C. — Several pipeline protesters were released from a British… Continue reading

All eyes on Andrew Scheer as Conservative convention set for Halifax

OTTAWA — After a week of internal caucus squabbles, Conservative Leader Andrew… Continue reading

Trump says his White House counsel not a ‘RAT’ like Nixon’s

BRIDGEWATER, N.J. — President Donald Trump insisted Sunday that his White House… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month