The Canadian dollar crept closer to U.S. parity on Friday than it has been in nearly 30 years, at one point hitting 91.94 cents US.
That's an increase of more than eight tenths of a U.S. cent over the previous day's trading, and brings the loonie to a level not seen since Oct. 12, 1977.
The currency's gain came on the heels of a 0.43-cent rise Thursday, triggered by a hotter-than-predicted inflation report for April.
The numbers on Thursday and Friday were expected to put pressure on the Bank of Canada to raise interest rates, which have remained static at 4.25 per cent since last May.
"If there was any uncertainty about what the next move would be by the bank, I think yesterday's higher than expected inflation data put everybody on the same page in terms of anticipating the next move would be tightening,'' said George Davis, senior technical analyst at RBC Capital Markets.
Michael Kane, of the Business News Network, told CTV Newsnet the flurry of retail activity has helped drive the dollar.
Friday's rise comes as a Statistics Canada report said retail sales were up 1.9 per cent in March, hitting $34 billion and boosting the sales gain for the first quarter of 2007 to two per cent. Source...