The loonie cleared another symbolic milestone Tuesday, making strong gains against the U.S. dollar.
By end of day Canadian currency closed up 1.34 cents to 108.52 cents US.
TD Securities strategist Eric Lascelles told Â鶹´«Ã½net Tuesday that the Canadian dollar is just one of many currencies benefiting from a weak U.S. dollar.
He said Canada is perhaps getting a little extra push because of high prices for commodities such as oil, natural gas and gold.
Traders are expecting ongoing declines in U.S. crude oil stocks, heightening fears that supplies may be limited going into the Northern Hemisphere winter.
Analysts think some traders and investors will try to push oil prices past the US$100-a-barrel mark by the end of this week.
Record highs
The soaring loonie smashed a 50-year record last Wednesday after it topped the high of 106.14 cents US. The old record was reached on Aug. 21, 1957.
On Friday, the Canadian dollar closed at 107.04 cents US, bolstered by a drop in the nation's unemployment rate to a 33-year low. The jobless rate fell from 5.9 per cent in September to 5.8 in October.
Despite its speedy climb, BNN's Michael Kane said Tuesday that some currency analysts believe the loonie is overvalued and could "fall to 95 cents US by the end of this year."
Meanwhile, Finance Minister Jim Flaherty said Monday he was happy to see that some major Canadian retailers have slashed prices to better reflect the power of the rising dollar.
"I'm encouraged by the fact that many retailers have lowered prices,'' he said after a speech in Toronto.
"There's still some adjustments to be made, quite clearly, given the increased purchasing power of the Canadian dollar and the extent of that increase.''
Flaherty also said retailers are happy about the Tories' recent move to further reduce the goods and services tax to five per cent by Jan. 1, 2008.
With files from The Canadian Press
