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The US dollar’s woes continued early Tuesday as the Canadian dollar climbed to fresh 30-year highs against its US counterpart, as continuing housing market concerns and higher European interest rates continued to hurt the US currency.
The Canadian dollar reached the high of C$1.0367 after the release of the Canadian retail sales report that far exceeded already high expectations.
The Canadian currency had earlier been trading above the C$1.0400 mark, but gained ground on the dollar as it was retail sales jumped 2.8% in May.
The results pave the way for further Bank of Canada interest rate increases this year and there is a growing belief in some quarters that the Canadian dollar could reach parity with the US dollar in the near future. The two currencies have not held the same value for over 30 years.
Meanwhile, the euro reached yet another record high against the dollar on Tuesday, hitting $1.3852 in European trading this at one point, before falling back to around $1.3815.
The ECB is expected to lift interest rates from the current level of 4% in September. However, US interest rates have been unchanged at 5.25% for the last year.
As a result, currency investors are in a better position to profit from the euro than the dollar.
06:11
Posted on Jul-30-2007
