Canada dollar hits highest level since late 1800s
Wow!!... This is a piece of history... the dollar is at the highest level since the 1800s?!!
By Frank Pingue
TORONTO, Oct 31 (Reuters) - The Canadian dollar raced to its highest level since the late 1800s against the U.S. currency on Wednesday, thanks to lofty oil prices and a weak greenback after the U.S. Federal Reserve cut interest rates.
Domestic bond prices ended lower as economic data from both Canada and the United States topped expectations while the Fed signaled it may be done with rate cuts.
The Canadian dollar closed at US$1.0585, making a U.S. dollar worth 94.47 Canadian cents, up from Tuesday's close of US$1.0492, or 95.31 Canadian cents.
Shortly after the North American session ended, the red-hot Canadian currency hit US$1.0617, or 94.19 Canadian cents, which some market experts consider an all-time high, given the drastic change in market conditions since the 1800s.
A publication called "A History of the Canadian dollar" is published on the Bank of Canada's Web site at http://www.bankofcanada.ca/en/dollar_book/ and shows the Canadian dollar was valued at US$2.78 in the late 1800s.
"A good part of the move has just been related to the usual suspects," said George Davis, chief technical strategist at RBC Capital Markets. "Broad-based U.S. dollar weakness ahead of the FOMC helped the Canadian dollar ... and obviously we also saw commodity prices do very well today."
The Fed did as expected and cut its key overnight federal funds rate to 4.50 percent, putting U.S. and Canadian rates at par for the first time since early 2005.
Canadian dollar pulls back after hitting record overnight: 106.17 centsUS.
17 minutes ago
TORONTO - The red-hot Canadian dollar has cooled only a little after hitting an all-time record against the greenback in overnight trading, when it reached 106.17 cents US after a U.S interest rate cut.
Just before 9 a.m. ET, the loonie was trading at 105.82 cents US, down 0.03 of a cent from Wednesday's afternoon closing level, which was a 50-year high.
The previous all-time high was 106.14 cents US, reached on Aug. 21, 1957.
The greenback also sank to a record low against the euro after the U.S. Federal Reserve's decision to cut interest rates by one-quarter of a percentage point to dampen an economic downturn.
The U.S. dollar's tumble has also driven investors to the commodities market as oil prices surged above US$96 a barrel in electronic trading overnight, while gold prices topped US$800 an ounce.
Maria Jones, foreign exchange strategist for TD Securities, says the loonie is being hoisted by what she calls "almost a perfect storm" of factors.
Markets reacted positively to the tax cuts announced in Tuesday's federal mini-budget. Jones also says the dollar is being pushed up by rising prices for oil, gold, and other commodities which Canada exports.
