Loonie Trades Near Parity with Greenback

The Canadian dollar trades near parity with its U.S. counterpart as traders shored up bets before the meeting of the nation’s central bank to determine the interest rates, occurring next week.

The relatively fast pace of the economic recovery in Canada gave birth to the speculation that the faster rebound may result in the faster increase of the interest rates. The economic recession had somewhat lesser impact on the Canada’s economy, compared to other countries, and now it benefits from the resulting fast-paced recovery.

Some analysts predict that the Canadian currency will not change significantly until the central bank’s decision about the interest rates would be announced. The Loonie rose to the highest level and reached parity with the U.S. currency yesterday for the first time since June 2008.

USD/CAD traded today near 1.0004 as of 16:23 GMT after opening at 0.9985. EUR/CAD traded at about 1.3555 down from the opening level of 1.3632.

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