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[ThatHawaiiGuy]

Canadian dollar hits 7-year high as greenback sags

[Spanking good news for Hawaii...this is where they come when their money is up...or used to anyway...heck they may even start investing in real estate here again...]

7 October 2003, 12:46pm ET

TORONTO, Oct 7 (Reuters) - The Canadian dollar hit its highest level in nearly 8 years on Tuesday as greenback wilted under the pressure of renewed doubts about the U.S. economy.

At 12:40 p.m. (1640 GMT), the Canadian dollar was at C$1.3284 to the U.S. dollar, or 75.28 U.S. cents, up from C$1.3401 to the U.S. dollar, or 74.63 U.S. cents, at the previous close.

The currency hit a high of C$1.3265 to the U.S. dollar, or 75.39 U.S. cents at mid-morning, a level last seen in November 1996.

"Clearly the momentum is to push the U.S. dollar weaker and the Canadian dollar should get stronger over the next weeks and months," said Jack Spitz, director of foreign exchange at National Bank of Canada.

"The U.S. administration is acquiescing to a weaker dollar and the Canadian dollar will benefit."

The greenback was weaker as the market doubted the strength of the U.S. economy and fretted over the size of the U.S. current account deficit, analysts said.

Traders were also on alert about possible yen-weakening intervention by the Bank of Japan. But Canadian market players doubted such a strategy would be able to stem the greenback's retreat.

"If one looks at the Bank of Japan over the course of the past number of months, they've intervened countless times and yet the momentum is still there to take the Japanese yen stronger, so intervention in and of itself doesn't work," Spitz said.

Also helping Canadian dollar sentiment was a strong read on Canadian purchasing activity, as the Ivey Purchasing Managers Index rose to 59.4 in September from 51.1 in August. Markets had expected a small rise to somewhere between 51 and 55.

However, since the Ivey numbers are not seasonally adjusted, traders rarely focus on them.

The market is now waiting for Friday's Canadian employment and trade numbers.

A strong set of numbers could ease growing expectations that the Bank of Canada will cut interest rates on Oct. 15.

Canada's benchmark overnight rate sits at 2.75 percent, versus 1 percent for the comparable U.S. rate. This rate gap has underpinned the domestic currency's meteoric rise this year.

http://finance.lycos.com/qc/news/story.aspx?story=35962971


Remember on the other board when I used to post the value of the loonie every day and for a while there I was joking they'd be giving away toasters everytime you made and exchange...(their currency was so low) I even took a vacation up there and I said might be a good time to buy loonies...well "shoulda woulda coulda" bet they gain yet more over the coming year I have a couple bills still I never exchanged they keep growing in value...

I remember one time we went up there and it was .75 to the dollar we thought it was a great deal cuz stuff is cheap anyway plus the exchange...back to where we were in the early 90's...glad I took that vacation 2 years back...told ya to go...that extra 10 cents makes a diff when you add up hotel room and car...never will be that way again our dollar is sinking for the "fore-see-able future"...